Summer 2007

Transforming Markets

In fields from biomimicry to consumer electronics, Haas graduates use lessons from the Management of Technology program as a catalyst for change.

By Kim Girard


As Jason Oppenheimer, MBA 03, set out to launch PAX Water Technologies with two colleagues last year, he faced a near-Sisyphean task: selling the idea of a new "green tech" water mixer to the managers of California's water utilities. Oppenheimer needed to convince the managers to replace massive 20-foot tall, 400 pound traditional mixers with PAX's tiny 6-inch long by 4-inch wide impeller, which seemed like convincing them to use a spoon to stir a swimming pool.


"Most of the water utilities we're selling into have been around 30 to 100 years and they're very reluctant to work with a new company, never mind a new product," says Oppenheimer, a 35-year-old environmental engineer who worked in water pollution control in Oregon before he earned his Berkeley MBA. To sell the case for PAX Water, Oppenheimer says he applied what he learned about business strategy in his Management of Technology (MOT) classes, which are designed to teach business and engineering students how to address the challenge of brining new technologies to market. Like other water mixers, PAX's impeller keeps drinking water from stagnating in storage tanks, ensuring disinfectants are mixed thoroughly to prevent bacterial growth. But PAX's biggest selling point is that its mixer promises to conserve energy by up to 80% for some utilities, consuming the energy equivalent of just two light bulbs when used in a four-million-gallon storage tank. And at $25,000 to install, it also costs less than rival technologies.


The PAX Mixer technology is rooted in the principles of biomimicry, a new approach to engineering that takes its inspiration from forms and processes found in nature. Those principles can be used to design everything from cooling fans to bandages. The PAX Mixer is designed to create a vortex, which is the path of least resistance for efficient fluid movement in nature. "At PAX we see how fluid moves in nature and we use that to inform our approach to every business opportunity," says Oppenheimer, who counts two former Haas grads, Trevor Daughney, MBA 03, the PAX group's vice president of sales and marketing, and Peter Fiske, MBA 02, the CEO of PAX Mixer and former CEO of startup RAPT Industries, as part of his work network.


Oppenheimer, PAX Water's vice president of marketing, used what he learned at Haas to develop a business plan and, within months, had convinced two of the biggest utilities in California to try the mixer. "I never would have been able to do something like that before I came to the MOT program," he says. "This program gives you a sense of comfort when you go out into the real world."


Oppenheimer's path is unique, but only one example of the innovative way hundreds of MOT students are coupling business and technology skills to start new businesses, create new markets, improve lives in third-world countries, or to manufacture a single product.


Now in its twentieth year, MOT has grown from a small cluster of classes to UC Berkeley's largest interdisciplinary certificate program, enrolling students from the Haas School, Berkeley's College of Engineering, the School of Information, and other departments on campus. MOT graduates have built a powerful network in the US and abroad, from the halls of high-tech startups and venture capital firms to the executive ranks of Fortune 500 companies such as Google and Microsoft. For the 1,000 students taking MOT classes each year, the program's benefits remain the same as when it was founded.


"We are about helping graduate students at Berkeley understand how technology creates value for people, companies, and society at large," says Andrew Isaacs, the executive director of MOT and Haas School adjunct professor. "That's our mission."


While MOT's goals have remained constant over the past 20 years, its approach has evolved along with changes in the global economy and especially in response to the needs of technology-intensive industries. During the early 1980s, new management and assembly line techniques used by the Japanese turned the US manufacturing industry on its head. Computer giant IBM was frozen in place as it experienced a massive decline in mainframe sales. Ford Motor Company was losing ground in the area of technological innovation. Fearful of falling ehind, corporate leaders sought to partner with universities in an effort to improve the training of business and engineering students headed for work in technology companies.


They found a receptive audience at UC Berkeley where a similar movement was already underway at Haas. Dean Raymond Miles and Professor David Teece, who had written extensively about why innovating firms failed to profit from their innovations, were huddling with Karl Pister, at the time the dean of the College of Engineering, to identify a solution to the problem. The solution, they all agreed, was to create a new program that offered joint classes for business and engineering students to learn in an interdisciplinary setting.


In 1987, the Haas School and the College of Engineering responded by hiring new faculty members to teach courses in high-tech marketing, new product development, and innovation management. The schools also decided that classes alone were not enough and drafted a committee to set long-term goals for MOT and create lasting partnerships between UC Berkeley and industry. "The plan stressed the importance of commercializing technological products and services, the adoption of technological systems, and the importance of manufacturing," says Robert Cole, a Haas School professor emeritus and former MOT co-director.


In 1989, the MOT program was officially launched as a certificate program with an advisory board to guide MOT and raise funds for MOT fellowships. Executives from Xerox, NEC, Hewlett Packard, and Digital Equipment Corporation signed on as charter members.


Today the program offers more than 40 graduate courses in technology management and now includes such emerging fields as alternative energy, clean technology, new business models in information technology, nanotechnology, and biotechnology. MOT has also grown to address issues in developing nations by creating the Bridging the Divide Program with the goal of developing technological solutions to poverty. Under the program, MOT together with the United Nations Industrial Development Organization (UNIDO) has sent over 90 Berkeley students to work in 17 countries in Africa, Latin America, and Asia on clean water projects, disease reduction, rural electrification, and other needs in the developing world.


"Our work in the developing world has Haas written all over it," Isaacs says. "These projects apply technology and sustainable business models to address social needs in the developing world in a profound way."


Under Isaacs' tenure with MOT co-chair Rashi Glazer new courses have also been added to reflect market trends in the new field of clean technology, including a new course launched in 2007, "Energy, Sustainability, and Business Innovation." "When something new comes on our radar we offer it," says Glazer, a professor in the Haas marketing group with expertise in the technology side of marketing. MOT uses a market mechanism to gauge the popularity and efficacy of new courses and discontinues classes if they do not measure up.


Innovation is an essential element in many MOT classes, aligning the program closely with the Haas School's Leading Through Innovation focus. The innovation theme runs through all four of Isaacs' courses, from his popular "Opportunity Recognition" class to "The Business of Nanotechnology." Joining Isaacs, among many others, is Henry Chesbrough, an MOT professor and popular author of two books on innovation. Chesbrough, who directs the Center for Open Innovation, teaches an "Introduction to Management of Technology" class.


Sara Beckman, a senior lecturer at Haas and the director of MOT from 1992 to 1997, also teaches innovation, using her classroom as a lab. In her class, teams of five students, including an engineering student, an MBA student, and a California College of the Arts student, race to take an idea and turn it into a prototype within three months, presenting the final concept at a trade show at Haas in December. A recent survey of Beckman's students found that many of the lessons they learned in her class related to interdisciplinary team dynamics, an experience central to management development.


"Working on interdisciplinary teams is one of the most difficult things to do in the real world," Beckman says.


Beckman's class also helps students innovate in a world where incremental changes in product development is no longer enough. "In the last five or ten years there's been a lot of emphasis on version 1.2, 1.3, and 1.4 instead of putting something radical or different into the market," she says. "Now people are saying 'Uh oh, we've got to innovate and do breakthrough kinds of work.' "


Han Feung, MBA 03, a senior manager of new product planning at Samsung, feels that pressure to think "out of the box" every day.


At Samsung's Global Strategy Group headquarters, 5,600 miles from Berkeley in Seoul, South Korea, Feung works with a 20-person marketing team to develop new takes on cell phones, MP3 players, televisions, and other consumer electronics products.


Feung, who is from Raleigh, North Carolina, and is learning to speak Korean on the job, says classes like Isaacs' "Opportunity Recognition" and case studies throughout the MOT classes contributed to his broader understanding of how the technology market works today. "The academic theory isn't too terribly new but it's the exposure to the high tech industry in so many different cases and understanding how technology is applied that's most valuable," he says.


According to Feung, it's important that Samsung focus on branding, content, platforms, and new business models in a market where the product itself is being commoditized. "We need to connect Samsung with the ecosystem so we're not a stand alone hardware player," Feung says. His work includes helping grow a brand alliance with Microsoft on the Xbox 360, which uses Samsung LCDs at all of its kiosks, and working with other companies to link Samsung devices with content and services.


To fuel his creative side, Feung relies heavily on customer input, spending time with focus groups both online and offline, analyzing purchasing data, talking to retailers, and watching how consumers behave in stores.


He also turns to the Haas Alumni Network, where his former peers are working at big companies such as Google, AOL, Microsoft and Yahoo! - all potential Samsung partners. "I made so many connections at school," Feung says. "In some cases these guys are now my primary contacts." Another chance for Feung to uncover new business opportunities comes at the annual Consumer Electronics Show in Las Vegas, where many Haas School, and especially MOT alumni, reunite to talk business.


 Earlier this year, Feung sat down with MOT peer Michael Shilman, an ex-Microsoft researcher and an expert in user interfaces, to sound out a new product idea. Shilman received his BS, MS, and Ph.D. in electrical engineering and computer science from UC Berkeley. "As a marketing guy at a tech company it's great to be able to turn to real technology experts like Michael," Feung says.


Like Feung, Amir Sharif, MBA 03, has benefited from the collaborative environment MOT fosters among engineers, computer scientists, and MBAs extending well beyond Haas.


"Outside of the MOT program, there is not a lot of cross-pollination between MBA students, who think engineers don't know much about business, and engineers, who often view business as fluffy and non-vigorous," Sharif says. "But if you come to MOT you are already interested in engineering and business. The collaborative environment forces business students to leverage the engineering students' skills and vice-versa."


In his MOT classes, Sharif, who studied math and philosophy as an undergrad, reconnected with his high school friend Anoop Sinha, a Berkeley Ph.D. graduate in computer science. In 2002, the pair traveled to China together to study entrepreneurship and high-tech business. The two connected again after Sinha launched the startup media network Danoo, where Sharif eventually joined the San Francisco-based company as senior director of product management.


"The main benefit of the MOT program was the people," says Sinha, who also thanks Isaacs for introducing him to Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm that is backing his company.


At PAX Water, Oppenheimer says his MOT classes provided the tools he needed to merge his passion for public health with a new business venture. "I really think that my MOT classes tied together everything I learned in business school," he says, noting that Isaacs remains an advisor to his company. At the end of the program, Oppenheimer says, "you put away your books and retain the core concepts, applying them continuously in the real world."


PAX Water is starting to accumulate a number of successes. Its first customer, the City of Ontario, Calif., purchased a PAX system in April with plans to order more. Redwood City, Calif., signed on with PAX last spring after participating in PAX's beta testing program.


"Here we are a year later and we already have our first purchase orders, and large entities are interested in working with us," Oppenheimer says.


As PAX moves toward profitability, the company intends to market its water mixer across the country and possibly abroad. In the less developed world, its relatively inexpensive systems could improve the delivery of safe drinking water and sanitary services with solar-powered treatment technologies.


Those goals fit neatly with the mission of MOT, Isaacs says. "We've always believed that the MOT program isn't just about making money," Isaacs says. "It's about changing the world."


One innovation at a time.


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Jason Oppenheimer, MBA 03

Jason Oppenheimer, MBA 03

Jason Oppenheimer, MBA 03

Han Fueng, MBA 03, applies his MOT classes as a senior manager of new product planning at Samsung in Seoul, South Korea.