Few subjects are more timely than the present, but the turbulence of the current present and recent past makes a conference about what's to come in global markets possibly even timelier. And so it was at the New York 2008 Alumni Business Conference, aptly titled "A Look to the Future." The first-ever alumni conference held at NYU Stern's home campus, in New York, the one-day event in May, co-presented by Condé Nast Portfolio and sponsored by MBT Shoes and Microsoft, attracted more than 300 attendees with a slate of speakers extraordinarily well qualified to observe, analyze, and prognosticate.
Alumni and guests traveled from around the country and the world to hear from industry leaders and scholars on current market issues on financial risk, investing, entrepreneurship, marketing, digital media, and social networking. Dean Thomas F. Cooley and Aswath Damodaran, professor of finance and David Margolis Teaching Fellow, provided keynote remarks, while Edward I. Altman, Max L. Heine Professor of Finance, and Mark Tercek, adjunct professor at NYU Stern and, at the time, director of Goldman Sachs's Environmental Markets Initiative, among others, offered their expertise in the breakout sessions.
In his welcoming remarks, "Future Shock: Dealing with Uncertainty," valuation guru Damodoran, a perennial favorite professor, struck the appropriate tone with his discourse on risk, which he defined as a combination of danger and opportunity. He observed that investors, particularly banks and hedge funds, are fixated on models, which is unfortunate in that the complexity of models cannot keep up with the complexity of the assets they are valuing; complex models require more data inputs, and hence more errors; and complex models create a more complex output. "Where there is an upside, there is a downside," he reminded the audience. "Risk is always relevant. Risk is everywhere."
Suitably advised, if not chastened, the crowd broke out into three different sessions. Frances Milliken, Stern professor of management and organizations and Peter Drucker Faculty Fellow, moderated "The Future of Green as a Business Strategy." Panelists included Steven Sturm (MBA '75), group vice president of Americas Strategic Research and Planning and Corporate Communications for Toyota Motor North America Inc.; Tercek; and Brian Dumaine, editorial director of Fortune Small Business. The panelists agreed that companies are increasingly exploring and implementing environmentally friendly practices to generate revenue and build good will.
Current conditions in global credit markets were the subject of another session, wherein Altman provided his annual forecast on default and recovery rates. He explained that the credit markets lead the real economy, noting that the last three recessions, including the current one, "were motivated and caused by issues in the credit markets." His advice to investors: Hold off three to six months before investing in distressed debt.
As befits a session on social networking — an appropriate lead-in to the lunch break — a full complement of five panelists took on "The Digital Future: What Social Networking and Marketing Tools Mean for Businesses and Entrepreneurs." Arun Sundararajan, associate professor of information, operations, and management sciences and NEC Faculty Fellow at Stern, led the lively group, which included Douglas Atkin, partner and chief community officer of Meet-up Inc.; Bant Breen, president of Interpublic Futures Marketing Group; Rob Master, director of media North America for Unilever; Kenny Miller, VP and creative director for MTV Networks Global Digital Media; and Marc Sirkin, lead social network strategist for Microsoft.
Along with a panel discussion on the need for defensive brand management on social networking sites, Sundararajan summarized the group's insights with several observations: social media needs a simple, elegant, and portable reputation system, much like eBay's; product reviews do not comprise a representative sample of "people like me"; and investments in social networking need to be quantified to justify their inclusion in advertising budgets.
Lunch provided an opportunity to connect the old-fashioned way — in person. The keynote address, by Dean Cooley and Dean of the Undergraduate College Sally Blount-Lyon, brought a recounting of milestones reached and those in the making. Alumni support, Dean Cooley said, helped make Stern, with one of the largest business school faculties in the world, "a hot place to do research." He reported that admissions to Stern remain strong, with more than 5,000 applications for 415 full-time MBA spots and 900 applications for 22 PhD spots.
With gratitude to alumni, Dean Cooley announced that the Campaign for NYU Stern had raised to date a record $180 million over the past five years, helping the School establish 23 new faculty chairs, 10 new faculty research fellowships, 125 new scholarships, and $40 million in infrastructure improvements. He also described how the Campaign has made it possible for the School to offer a new joint MBA/MFA degree with NYU Tisch School of the Arts, an MBA/MS in Mathematics and Finance with NYU Courant Institute of Mathematical Sciences, an MS degree with Hong Kong University of Science and Technology, an increased portfolio of non-degree executive education programs, and new programs in the Undergraduate College, as well as the opportunity to offer the Langone Part-time MBA Program in Westchester, NY.
Looking ahead, Dean Cooley stressed the importance of disseminating the School's rich intellectual resources and increasing its visibility in the media. He also discussed Stern's plans for global engagement, such as partnerships with the government and top companies in India, joint programs with schools in Western Europe, and study and research opportunities in China.
Dean Blount-Lyon stated that undergraduate admissions to Stern remain strong with more than 7,000 applications for 500 freshman spots, and that the quality of the applications is high, with GPAs in the top percentile and average SAT scores around 1440. She explained that the academic programs are increasingly organized around a global perspective: as of this year, 50 percent of students will have spent at least one semester abroad, and the School has launched a world studies track and a BS in business and political economy. In addition, Stern now requires a four-course sequence in social impact that spans all four years of study.
Postprandial breakout panels focused on the future of innovation and how that affects brands; investing in a volatile marketplace; and venture capital in a digital media world. In the first, moderated by David Carey, group president of Condé Nast Publications; Stern's Scott Galloway, clinical associate professor of marketing; and Peter Golder, associate professor of marketing, engaged in a provocative debate on whether innovation helps or hurts brands. "The next breakthrough," said Golder, "is already on the market and sold by a company that will not benefit from the market breakthrough." Though Galloway acknowledged that a strong brand can shield a product, he asserted, "Perfection is the enemy of innovation."
As for the challenges of investing in today's and tomorrow's volatile marketplaces, there was an easy consensus among moderator Mary C. Farrell (MBA '76), a financial services consultant; and panelists Madelyn Antoncic (MPhil '81, PhD '83), managing director and global head of financial markets policy relations at Lehman Brothers; Audrey McNiff (MBA '89), managing director at Goldman Sachs; and Jessica Reif Cohen (BS '77, MBA '79), managing director at Merrill Lynch. Unsurprisingly, even the pros are finding areas of opportunity scarce. Reif Cohen, a media specialist, focused on select cable content providers; Antoncic advised looking at sectors that have already taken a hit; and McNiff suggested distressed assets and hedge funds that can short and build a portfolio.
One recent investment that has paid its backers handsomely is Facebook, and the panel on venture capital in the digital world offered a candid look at how technologies and trends in media consumption are making such non-traditional business models attractive to venture players. Said panelist Alan Patricof, the founder and managing partner of Greycroft LLC: "Every big media company has its own venture fund because of the 'Facebook syndrome.' They'd rather lose tens of millions of dollars than miss out on deals like Facebook." The discussion was led by Charles C. Koones, CEO of Rockmore Media LLP. Other panelists were Dennis Miller, general partner of Spark Capital, and Stephen Baker, chief revenue officer of EveryZing.
The riveting plenary session featured Andrew Zolli, a futurist and global trends consultant with Z+ Partners, whose multimedia presentation drew heavily on demography to forecast trends. Massive population shifts over the next several decades, caused by varied rates of growth and decline, will result in increased urbanization, he said, but in newly prominent cities rather than the current major ones. These shifts will drive change across many industries, and, as always, the race will be to the swift. "Innovation," Zolli said, "is the creation of new forms of value in anticipation of future demand."
Clearly, Deans Cooley and Blount-Lyon, charged with steering an ascendant NYU Stern, would agree.