Saket Vora

I should have posted about this earlier, but better late than never. This past Thursday it was Diwali, the Indian ‘festival of lights’. This day is celebrated for a variety of reasons, one of which is to commemorate the return of Lord Ram back to the city of Ayodhya after he killed the demon-king Ravan and thus ended his 14 years of exile in the jungle. The townsfolk lit up rows of candles, from where Diwali (originally Deepawali) gets its name.

Anyway, it really came down to us getting some Indian food.  My mom (best mom ever) sent me a care package with chakri (some of you might have tried those really really crunchy swirls of fried dough, remember?), sweet kuchori, and mithai (Indian sweets). So that was a great start. Amit and I hit up the farmer’s market then took a trip down to the Indian stronghold of the Bay Area — Sunnyvale.

We went to a large Indian grocery store and couldn’t believe that the tline stretched 3/4ths around the inside the store. Thankfully it wasn’t bad when we left. We got to some chaat before making it back. On Tuesday I popped in some small samosa and kuchori and brought it all and the mithai to Hindi class. A feast was only appropriate!

There is a bigger celebration planned for the weekend. In other random news, we had a tree fail occur on campus. A large branch broke off in front of the Moonbeams cafe. I snapped this on the way home from the library…about 4 or 5 bikes caught underneath that we fished out.

On Wednesday I had lunch with Sarah at the Cantor Art Museum cafe. Sarah is the Arts Program director at Stanford, and we met while stuck in Dulles earlier this summer. I never recounted the full tale here, but told many people separately. On my way back to Stanford before classes started, there was a fuel leak discovered as we were taxiing from Dulles and they canceled the flight. We sat on the runway as firetrucks surrounded the airplane and the pilot says that “the firemen don’t like the idea of a plane full of passengers sitting in a pool of jet fuel” so they got us off. The best part? As we were deplaning, the pilot says “and our thanks to the passenger who spotted the fuel leak,” [emphasis mine]. Yikes. Anyway, we were both standing in line waiting to get our new tickets and talking when it turned that she was an art program director at Stanford AND the one who spotted the fuel leak. We talked a bit about what is going on and Stanford and I had mentioned how it would be neat to see some data visualization projects. So we met for lunch to discuss some new ideas for projects at campus.

It was my first time really exploring the Cantor Art museum and it’s really quite nice. A lot of Rodin sculptures too, including the Gates of Hell partially inspired by Dante’s Inferno.

 First they ignore you,
then they laugh at you,
then they fight with you,
then you win.
~ Gandhi

A few years ago  my friend Naman talked me about how big pharmaceutical companies don’t develop drugs for neglected diseases, and proposed creating a university-based pharmaceutical company. I laughed. I couldn’t see how that made sense in the value-chain. Well today I attended a seminar by Dr. Victoria Hale, the co-founder of the Institute for OneWorldHealth — a “non-profit pharmaceutical company.” Dr. Hale is a pharmaceutical engineer, but was unsatisfied with her work at pharma companies and wondered what she could do about the diseases that affect those in the developing world. People have noticed what she’s done — she is a 2006 MacArthur Fellow, fellow of the Academies of Science, an Ashoka Fellow, awarded for Social and Economic Innovation by The Economist, and a Skoll Award for Social Entrepreneurship.

The neglected diseases because despite market sizes in the billions of customers, they don’t have much money to pay. 1.1 billion people live with < $1/day. 2.7 billion people live with < $2/day. It doesn’t seem to get better beyond that — roughly 4 billion people live with < $4/day. Dr. Hale asked whether one could take a pharmaceutical company and remove the ‘profit’ aspect of it — could it work? It’s not totally sustainable yet, but with strong support from the Gates Foundation the iOWH has gotten a one-dose-cure for visceral leishmaniasis for $12. The crazy part? Despite this drug (paromycin) being effective, it was discontinued from production back in 1989.

The Institute for OneWorldHealth  has focused on malaria, diarrhea, and leishmaniasis. A few notes I jotted down:

• The 10/90 gap: 10% of the global health R&D funding denoted to diseases which that result in 90% of illnesses.
• Most neglected tropical diseases (NTDs) are parasitic, something which the developed world lacks and thus the way to fight the problem is more challenging. Little bugs have various stages in their life cycle and such.
• People in the bottom billion want choice, and they want to pay for medicine, thus be committed to the drug and program.
• The effective malaria drug, artemisinin, is derived from a plant that grows in China and Thailand. The process of cultivating the plant and processing it results in a treatment that costs a LOT of money, several hundred dollars. Researchers at Berkeley took the plant’s relevant gene, put it some bacteria, and fermented it. This innovative process has dropped the price to a $30 treatment, and is likely lower now. This same process was then adapted to form the basis for Amyris, which is trying to make jet fuel out of bacteria. How cool is that?
• One idea for supplemental income is for iOWH to take on an overlooked illness that affects those in the Western world and use the revenues from that to fund other projects.
• There is the important question of “whose standards to follow” is still a heated debate. Should all drugs go through the FDA and EMEA regulatory process? This would unavoidably increases costs so you might only be able to do far less than if you use the regulatory process in these other countries.
• What’s neat is that while you can market these drugs to the poor in the developing world, another group of people who work in the developing world can also use them — soldiers. The DoD would be interested in malaria treatments! That dichomoty is fascinating — the soldier who is carrying $20,000 worth of equipment needing the same $10 treatment that a person making < $1/day needs also.

But ultimately, Dr. Hale pointed that really, the pathogen that medicine fights is just the symptom. The cause is global poverty, and we have to do something to fight the good fight against it.

There are people in the world so hungry that God
cannot appear to them but in the form of bread.
~ Gandhi

[entering nerd mode, be warned]

So in my finance class (taught by the great Professor Admati in the Stanford GSB), we are learning about the capital asset pricing model (CAPM), which was developed in the 1960s and won the Nobel Prize in Economics. Grouped into “modern portfolio theory“, the CAPM describes how to optimize portfolios when choosing between a universe of risky securities, how riskless securities (like Treasury bills) factor into it, how diversification of portfolios results in reduces risk, and efficient portfolios.

The reason I bring this is up is because we finally moved closer to answering a question I have always wondered about — what is an appropriate discount factor to use when evaluating a project using net present value (NPV)? The time-value-of-money results in making cashflows farther in the future worth less in present dollars than cashflows closer to the present. Typical class or case problems provide discount factors between usually 10% and 15%.

The CAPM states that the discount factor = riskfree rate + beta*(expected return of the market  - riskfree rate)

where  beta is the risk factor associated with the project and the riskfree rate is the rate at which you can borrow/lend without risk, such as in U.S. Treasury bills. In other words:

The discount factor= riskfree rate + a risk premium

One can guess a reasonable beta by using comparable companies (should be ‘pure-play’); Google Finance will publish the beta for many companies. Some industries have low betas below 1, some have higher betas above 1 (the ones that are higher risk, more volatile).

This is all fine, but how does one calculate the expected return of the market?  The ‘market’ refers to all securities. So perhaps we can look at the Dow Jones (30 companies), or the S&P 500 (500 large cap companies), or perhaps the Russell 2000 (2000 small cap companies). You can look at their index funds and find a return. Should I go back one year? 3 years? Perhaps take the average (or weighted average?) of the daily returns? I’m curious because I tried looking at this today and the recent economic tailspin makes the ‘market return’ look pretty awful. But regardless, how do you even out the daily/weekly flucuations?

One case study I read had the protagonist call up a bunch of his fratnernity brothers on Wall St. to ask what the consensus market return is. This can’t be the only way.

I went out to my car this morning to run some errands when I saw this, written in ink, on my Obama car magnet:

How about you say it to my face next time?

Coming out of my MEMS class, I got a fairly unexpected call — Dr. Steve Walsh. Dr. Walsh, as some readers might know, is one of the professors at NC State who runs the Engineering Entrepreneurship Program (EEP). He and Dr. Tom Miller were in town for the Roundtables on Entrepreneurship Education (REE) conference and were by the Oval. I biked over to greet them, and we walked over to Kresge Auditorium where the one and only Vinod Khosla was speaking. Khosla is one of the most famous people in Silicon Valley. He was a co-founder of Sun Microsystems in 1980, then became a general partner at Kleiner Perkins in 1986. He left KPCB in 2004 and started his own firm, Khosla Ventures, which has gained attention (and notoriety) for its energy/greentech/cleantech heavy portfolio. Khosla is well known for making bold statements about how to combat global climate change and he speaks openly about how he takes a different approach to compared to environmentalist friends.

Khosla spoke to us about his approach to the energy problem, highlighted several companies he has invested in and why, and took many questions. Among hardcore environmentalists, he has taken flak for his lack of interest in the push to change US society’s behavior regarding energy usage — he utterly dismisses one claim on how we should only use 1 square of toilet paper, for instance. He asked people who drive a Prius to raise their hands, then said that instead of the extra $5,000 they paid for the Prius, they could have painted a 10 ft x 10ft white square on their room and have the same carbon reduction. He is a technology optimist that and says we as a global society need to produce 10 times as much energy as we do today — AND we can do it without causing the harm we do the planet today.  People protested and seem to think that Khosla doesn’t care about efficiency and conservation, but I disagree. He is smarter than that. His whole family drives hybrids. He is just thinking long-term — energy efficiency gains are only 10% to 20% of the problem, and they are vital to lowering the hurdle for upcoming alternatives. We should as a society adopt these changes, but Khosla is placing the bulk of his time and energy (and money) into going after the Goliaths — oil, gas, materials. The BIG sources of carbon.

I greatly admire and respect Khosla and agree with his approach. The talk was outstanding and I left feeling inspired. As soon as it’s online I’ll link to it.

After the Khosla talk I got a free Jamba Juice (they always mess up Nader’s order) and then we went to hear a performance of “Bagpipes from Around the World.” I like bagpipes, but in short quantities. It’s unusual in that it has a drone, but as Nader pointed out it removes any silence from the music, and often moments of silence is as important as the notes themselves. Still, it was pretty cool. I finished up by heading up to Nola’s on University Ave for a Social-E dinner where I had great conversations with Andi and Silvia.

Donny is back home in the US of A! Wow, I think very few of us can know what the past year has really been like for him. I can’t wait to catch up with him — need to convince him to come out to the left coast.

That’s all…I’m just happy he’s back.

This weekend up in Berkeley the Universities Allied for Essential Medicine (UAEM) organization was having a national conference, and a few friends of mine flew in from UNC-Chapel Hill to attend. Naman, Derek, and a fellow UAEM @ UNC leader Danika flew in before the weekend. Naman visited Deepak Uncle down in San Jose, but on Thursday night they came up to Palo Alto for dinner. Derek and Danika was able to get a glimpse of the Main Quad as they swung by the Oval to pick me up, and Nader joined us before we headed up to University Ave (unfortunately, Danika wasn’t feeling too well so she took a nap in my apartment). Ben Abrams was still in Palo Alto at the time and he came over to join us for a while — a really great guy. I can’t wait for Donny to swing by the Bay Area so the three of us can chat.

I heard about UAEM last year from Derek and Naman, and offered my services as a member of the Stanford community. One thing I did was go talk to Kenneth Arrow (Nobel laureate and professor emeritus) about UAEM’s goals and he signed the Philadelphia Consensus Statement.

UAEM’s goal is to improve the policies surrounding access medicines and drugs for those in poor countries and to help boost funding and research in neglected diseases, which are called as such because they affect mostly poor people in developing countries and thus don’t represent hundred billion dollar markets. Much of the access thrust concerns policies regarding technology transfer and licensing from the university to drug companies — hence the UAEM movement appears largely spearheaded by graduate students in law schools and medical schools. UAEM chapters have formed at various universities worldwide.

I went up to Berkeley on Saturday and joined Naman, Derek, and Danika for lunch a seminar or two. We chatted with students from other universities - and they came from all over including Harvard, Yale, Florida, British Columbia, Cornell, etc. - to learn what has worked at their universities. Before the college poster session, Derek, Danika, and I headed out for some fresh air. Remembering the nice view Nader got when he went around Berkeley, I suggested we walk up the hill towards the national labs and we were indeed treated to some great views of the East Bay — even spotted the Golden Gate bridge.

We also took a walk down the lively Telegraph Ave. and saw rastafarians, hippies playing music, and Hare Krishnas before getting a coffee at a part-classical-music-store-part-cafe. Perfect.

The last agenda items was a university poster session where we walked around and got to hear from the various students. The four of us hopped on the BART towards Oakland, where we met up with Matt Callahan,  a high school friend of mine doing Teach for America in Oakland. I can’t say it enough — amazing guy. He had a Sigur Rós cd playing and he was also at the concert in Berkeley. I think the others thought we were crazy and we excitedly talked about it for the next ten minutes. We picked up Tom, a friend of Naman that he hasn’t seen in a while, and headed to Alameda for dinner with some of Matt’s TFA friends at a great Thai restaurant.

The rest of the gang headed back to Matt’s house in Oakland but I got off at the BART for the 2 hour trip back to Palo Alto. I also remembered that there is no 11:30pm train southband from SF (just 10:30 and 12:30) so I had an hour to kill at a transfer station.

But it was nice to hear about what UAEM is doing and of course to see Naman and Derek and Matt and meet new friends like Danika. Can’t beat that.

The wonderful Food Issue of the New York Times Magazine had a feature on mac & cheese pancakes, a special of the famous Kenny Shopsin eatery in New York City, and I knew I had to try it once I saw it. Like my roommate Gene commented - it was not a question of if, but when.

So last Friday I gave it a go:

I even got the webcam going and hung it up in the kitchen (where we hang our oven mitts) and Kelly, Mary, and Mike tuned in for the live cooking action. Overall I’d say it was a success — I was using ready make pancake batter for simplicity but maybe they had too much sugar that countered the cheese? Or maybe the pancakes were too thick.

Regardless, it’s always fun to try something new!

Simple directions:
- Boil macaroni noodles to al dente, set aside and run cold water to stop cooking
- After placing pancake batter in skillet, sprinkle a layer of macaroni noodles over it
- Sprinkle finely shredded sharp cheddar cheese
- When one side of pancake is done, carefully flip
- Turn up the heat so that the top layer of cheese is seared and is nice and toasty

The Washington Post, LA Times, and Chicago Tribune have now formally endorsed Barack Obama for President. But frankly, I think these endorsements have overlooked a few important, if not crucial, reasons for supporting Obama. Here are some of mine. :)

I recently finished reading The Bottom Billion by Oxford economist and professor Paul Collier. I spotted it in the section of the bookstore with books on international development and poverty. The book is written in lay language from an economists perspectiv - I believe Collier said in a TED talk that he wanted to write an economics book that you could read at the beach. Rather than imploring action from a ethical or moral standpoint, Collier uses statistical analysis of economic data and the findings of his many investigations to study the many problems facing the “bottom billion” and suggest ways to reform how the developed world has approached the problem.

The “bottom billion” refers to the 1 billion members of humankind which are amongst the poorest and least well-off in this world. They are located in some 50 to 60 failed or failing states and face staggering economic, war, governance, and health conflicts. Collier posits that developing countries and developed countries are accelerating away from the bottom billion both economically and developmentally, and that what happens to the bottom billion affect the top five billion. This is a critical point, and one underscored by the global consequences that failed states have in global society. Collier, working closely with his colleague Anke Hoeffler, explores the idea of 4 traps that keep states from climbing out of the bottom billion class. And a central metric used throughout the book is economic growth.

First is the Natural Resources trap. A significant amount of natural resources come from troubled states, particularly in Africa, and this fuels a number of troubling behavior, such as economies that focus on a handful (or even a singular) product, to the way it attracts the corrupt and those seeking power.

Second is the Conflict trap. Collier suggests that the cost of civil war to a country is $64 billion excluding health and neighbor effects. He explores the way conflicts manifest themselves and  the blows to economic growth they invariably cause.

Third is the Landlocked trap. A disproportionate amount of states in the bottom billion are landlocked. He notes quickly that in a revised world, these inviable  states should not exist in the first place, but they do and so we must live with them. Being landlocked makes you more dependent on your neighbors, and so if you have failing states as your neighbors then despite taking the right steps yourself, your country will still be slow to see the signs of progress.

Fourth is the Bad Governance trap. I was especially interested in this one, because without studying this area deeply it is one area that I personally am apt to point out first.  Collier describes how democracy can falter when other fundamental tenants to a functioning democracy are absent, in particular, a system of checks and balances. In certain circumstances, an autocracy is ‘preferred’. I overall found this subject to be the most interesting, particularly as Collier gets into discussing the benefits and consequences of ‘aid’ with relation to each of these traps.

Foreign aid is a subject that is a bit raw for many Americans.  Despite giving an enormous amounts of aid in terms of actual dollars, this country is chided for not matching other countries’ aid in terms of % GDP. Many people are rightly wary at the idea of throwing more money at programs that don’t seem to be working. I suspect though that most of us do not have the knowledge to truly judge the effects of international aid (a rather vast and complicated topic) and it doesn’t help that the media is cutting back on foreign correspondents who might help Americans understand what aid really does. Collier wants to know what kind of aid works and how much is most effective. He suggests that in the immediate aftermath of a coup or conflict resolution, providing massive budget support isn’t productive — the civil service in such countries are woefully thin and inadequate to usefully manage such aid. Human capital is needed instead to help rebuild the civil service and the political and civil infrastructure. But once aid starts to flow, too much and it is counter-productive. Collier also points out a flawed approach that institutions have previously used — telling a developing state what policies to implement in exchange for aid money. First, this allows the ruling party to blame ‘foreign powers’ for causing any problems down the road, and no one likes to be told what to do.

Collier is also even-handed on military intervention as an option to leave on the table. It’s this kind of pragmatism that compelled me to read it. All in all I think it’s a must-read, but I acknowledge it’s my first foray into this type of literature. I encourage you to check out some criticism of Collier’s book too. Two big names you’ll quickly find in this subject are Jeffrey Sachs (The End of Poverty) and William Easterly (The White Man’s Burden). My friend Joel Thomas has a post about these two leaders.

If you find The Bottom Billion at a bookstore, I encourage you to at least read the 15 page section on “Aid and the Trap of Bad Governance” (page 108 in the hardcover) — it’s quite good. It was a surprise to see the venture capitalist model pop up in such a context!

That was fast — YouTube and iTunesU have video of the 2008 Stanford Roundtable online now. I encourage you to watch it.

Check out the actual YouTube link for a higher quality version. I know it’s long, but check out some segments I thought was nice:

- Kavita Ramdas on collective leadership,  10:50
- Justice Kennedy on leadership in the Supreme Court and how a decision is made, 14:04
- Professor David Kennedy, opening remarks, 20:30
- Kavita Ramdas on ’sharing’ democracy with other nations, 31:50
- President Hennessy on current students and Tom Brokaw’s humorous condition of his ‘house divided’ between Berkeley and Stanford, 33:32

Brokaw gave a speech at Berkeley once where he said “I know what it’s like having one daughter at Berkeley and one at Stanford, it’s like having one member of the Grateful Dead and one member of the Mormon Tabernacle Choir.”

- Jeff Raikes on Brokaw’s divided house and then creative capitalism for the development, 41:22

- Kavita Ramdas on ‘what is democracy?’ (ie ,not just holding elections), 45:00

Ramdas highlights that real democracy comes when people are able to hold both government and the private sector accountable and to a higher standard. Specifically mentions the outrage after Hindu exremists killed Muslims in the state of Gujarat.

- Justice Kennedy on ‘rule of law’ and real meaning of ‘pursuit of happiness’ (47:25), on lack of safe drinking water (49:05)

- Justice Kennedy: “Lookit, the temptation of the rule law is that you have a Magna Carta, then you wait 600 years, then you have a revolution, then you have a civil war…we have to realize the fierce urgency of now, these people cannot and will not wait, and should not.”

- President Hennessy on the problems of the press,  59:35
- Tom Brokaw on people making an effort to be informed, 1:03:15
- Kavita Ramdas on ‘the personal is political’, 1:07:42
- Congressman Becerra on Eleanor Roosevelt, 1:19:04

Enjoy!

After the Roundtable, we had lunch then went to the Stanford v Arizona football game. Turnout (as you can see in the pictures above) was pretty embarrassing for our homecoming game, but hey, it’s Stanford. The game was great — Stanford drove down the field and scored the go-ahead TD with 25 seconds left and hung on to win. I went with Joey, Charles, and Nader and ended up spotting a bunch of other friends at the game too.

Compared to an NC State game experience, Stanford’s student section is uh…different. First, many fans (and even the cheerleaders, at times) don’t understand you aren’t supposed to be loudly cheering while your team is on offense about to snap the ball. Near the end, some idiot with a microphone kept trying to start cheers as our team was breaking from their huddle. At one point, enough students shouted back to quiet down at the cheerleaders/idiot guy that they stayed quiet. On the flip side, during defense with Arizona in front of the student section, the megaphone cheerleader guy actually yelled “Come on Stanford this is a football game! Not a midterm! Make some noise!” Another thing - you know how we used to jingle our keys to mock the ‘fans’ who leave the game before its over? Well over here, you jingle your keys when Stanford is about to placekick. I was talking to a guy from UTexas @ Austin and he was equally bewildered. The drum major for the marching band was going with a Dr. Octopus theme, and the halftime show consisted of them making fun of Arizona and John McCain — petrified wood, the grand canyon = “meh”, and the MLK Jr. holiday.

Now I’m off to spend the rest of the weekend doing work.

This was homecoming weekend at Stanford. I woke up early this morning for the annual Stanford Roundtable, a special event where a distinguished panel meets to discuss topics revolving around a theme. I went last year, and got to see Justice Stephen Breyer, General Abizaid, and Tom Friedman.

This year the panel was moderated by Tom Brokaw, with guests including Justice Anthony Kennedy, CEO of the Gates Foundation Jeff Raikes, former CEO of HP Carly Fiorina, distinguished professor of American history David M. Kennedy, Congressman Xavier Becerra, Stanford’s President John Hennessy, and CEO of the Global Fund for Women Kavita Ramdas. This year’s theme was Courage, Compassion and Character Leadership for the 21st Century, and much of the discussion was about leaders — what kind of leaders do we need, how we create or find good leaders, how do we treat leaders.

Ms. Ramdas quickly emerged as a crowd favorite — her opening statement earned the first crowd applause and throughout the discussion the crowd applauded her insights and observations. She commented that the culture of this country often equates the organization with a single leader (Steve Jobs for Apple, Bill Gates for Microsoft, etc) that it forgets that it is more meaningful to have communities of leaders, because leadership isn’t just about an individual. Another notable moment was when she reminded Tom Brokaw that the phrase ‘the personal is political’ originated with the feminist movement and that it had real literal meaning — as in when woman’s choice about her own body is made political. Ms. Ramdas helped drive the discussion to acknowledged the truly global aspect of today’s world — and I was in particular intrigued that Justice Anthony Kennedy so purposefully highlighted the fact that over a billion people lack clean drinking water, and how woman and children in sub-Saharan Africa have to spend hours and hours each day simply finding water. He echoed Martin Luther King Jr.’s words about the fierce urgency of now.

Raikes, longtime Microsoft executive and current CEO of the Gates Foundation, was asked about how a new kind of leader — the “brainiacs” — are now looking to solve the problems of the world. All the teachers in the room (Hennessy, both Kennedys) remarked that even compared to the ’60s, the students they see today are more tolerant, have traveled more, are more worldy in their knowledge, and aren’t afraid to tackling hard global challenges. They know they have the tools to do such things. The discussion also shifted to the media, with references to Fiorina’s experience in the McCain campaign and of Mr. Brokaw himself. They acknowledged that due to the influences of an advertising model, the news has gotten shallower. Kennedy remarked that the press does a great job at telling the public what the Court decided, but not so much at why the Court decided. Brokaw had observed that people today have more new sources at their fingertips than ever before, and that they should not expect to be force fed things — that people need to work at being informed.

The video for the Roundtable will be on iTunes U and YouTube in a few days, so I’ll be sure to revisit this.