Application Advice

A reader asked the following: "... I'm studying for the gmat, what score should I target for? What does an interviewer look for in a candidate? By the time I apply, it'll be 2 years since I've graduated, should I wait for 3 years before I apply? Is there any other advice you have for a new applicant? Thanks!"

GMAT: The basic idea of the GMAT is that it can't help you but it can hurt you, so you want it to be a non-issue. My target would be to be above the mean (which is somewhere just above 700). I don't think getting a score higher than that really helps, but if you're below say 650, the other parts of your application have to be much stronger.

Interviewing: You should prepare for your b-school interview like you would prepare for a job interview. It's probably going to be a lot less formal, but you have to come across very polished and well spoken. If you have any holes in your application (no community service, gap in your work experience, little leadership experience), expect to be asked. Definitely have a good, canned answer for why you want to go to business school and why you want to go to UCLA Anderson. Those are the two most important questions. I didn't do this when I applied, but I would practice answering these questions aloud and keep the answers to 1 to 2 minutes. Too short is bad and too long is worse. Interviews are the key component of getting a post b-school job, so UCLA Anderson wants to accept people who will be very poised and confident when they go to interview with Goldman/McKinsey or pitch their business idea to a VC.

Age: This is going to be more of personal choice and it really depends on your current situation. I would say that most people here are in the 27 year old range. I think if you enter UCLA Anderson at 30 you feel a little old and if you come in at 25 you feel a little young. Ideally, I would say that you should try to come into b-school at around 27. That way, you'll be in kind of the same "maturity zone" as the rest of your peers. More work experience definitely makes the b-school experience a better learning environment. You'll have your own experience to relate to when you're learning about different aspects of business, and you'll have better comments to share with the class during discussion. But there's a trade-off -- you also want to get into b-school early, so you can graduate and start working at a great place with a lot more responsibility/impact.

General advice: I think the best thing you can do is be really introspective about what you want to do with your life. Your "story" about why you feel business school is right for you based on your background, values, and goals is critical. Don't say what you think the admissions committee wants to hear -- I think it's obvious to them (because they've seen that 1000 times). And I think one mistake people make is that they feel that they have to be really unique or different in their application. Just do what you think is true to yourself -- even if it may seem boring or basic.

I hope that helps!

Disclaimer: I don't interact with admissions office very much, so these thoughts are based on my impression from getting in and from the other people at school, which I think are probably pretty accurate.

There's no party like a b-school party

A lot of people assume that UCLA Anderson is a party b-school, I think part of that is simply because of location. It's LA -- the beach, the clubs, the bars -- how can it not be a party school?

Well, the truth is that we work extremely hard academically here. I would argue that we probably work harder than most b-schools, and that's for a few reasons. Our first quarter has 5 core courses (Econ, Stats, Accounting, Finance, and Marketing), which is more than most schools. In the first quarter you're just trying to get into the mindset of school and tests, and then you get bombarded with an outrageous amount of work. My undergrad courseload was pretty tough at Yale, and I would say that the courseload here isn't as intellectually challenging, but probably requires more time spent studying and in group work. Just so you know, the hard work isn't just to put students through the ringer -- everything you learned fall quarter really pays off when you start recruiting in the Winter. Another thing to note is that we have grades here (no grade non-disclosure). Some would argue that grades (a) put too much emphasis on coursework as opposed to extracurricular activities and (b) hurts collaboration among "competing" students. If you end up coming to UCLA Anderson, you'll see that both of these arguments do not hold here. We have so many student-run events here that it's impossible to go to all the ones that you really want to go to. Also, our student body is extremely collegial and cooperative, which I think is a testament to the type of person who chooses to come here. I read an article recently that said Wharton professors were complaining that Wharton undergrads were outperforming Wharton MBAs in their classes because the undergrads have grades. We have grades here because it gives people incentive to make the whole experience better, which includes participating in class and contributing to group work. Bottom line: Grades are good (in my opinion anyway).

Okay, so we work hard. But is it fun? I would guess that 90% of the student body will tell you that UCLA Anderson is an outrageously fun place to go to school -- not just because of the parties, but also because people are just fun to hang out with -- in the courtyard after class or while you're working on a group project. There are plenty of good laughs even in class because we know each other so well.

But what about the parties? Well, I'm going to save that for another post... there are some really great ones, so the subject deserves a stand-alone post.

Full-Time versus FEMBA debate

A reader asked me to comment on the Full-Time versus FEMBA (Fully Employed MBA) debate. I actually don't think there's much of a debate -- I'm fairly keyed into the issues of the school and this is one that is not discussed very often (at least from members of the full-time program).

That said, the two programs do not interact that much -- the two programs are on very different schedules and FEMBAs don't tend to attend as many social functions. This is completely understandable because the FEMBAs skew a bit older and married. Most importantly, they have full-time jobs at the same time, so they're even more busy than full-timers.

As a school, we're trying to encourage more interaction between the full-time program and the FEMBAs. There are a lot of benefits that can be gained from tapping into the network of the other program. So we're working on that, and it's something we can improve upon, but I wouldn't say it's a huge issue or a major source of contention. Thanks for the question and feel free to post more questions in the comments!

Anderson is for Entrepreneurship

If you've done any research on UCLA Anderson, you've probably seen the word "entrepreneurial" a few times -- whether it's describing the spirit of the students or the fact that we really go out and create businesses during or after school. I wanted to talk about my favorite program at the school -- TEC -- through which I've met a number of truly inspiring CEOs. Here are two profiles:

CEO #1. After graduating from UCLA Anderson, the CEO we met started a natural gas trading company right after the government de-regulation of the industry. While there have been some very tough times (our friends Skilling and Lay at Enron, at one point, tried really hard to push him out of business), he grew the business into a 100 person business with $5B in trade volume. Through the years, he remained great friends with professors Bill Cockrum and Al Osborne who both gave him invaluable advice. He recently sold the company to a large multi-national bank for serious money. Through the TEC program, this CEO spent 5 hours with us just chatting about his life and business.

CEO #2: During his time at Anderson, this CEO really used the resources available to him -- most notably the Price Center for entrepreneurial studies. He met his business partner at Anderson. He turned down a number of summer internships so he could start his business over the summer, and his final project at Anderson (the Applied Management Research, Business Creation Option) was continuing to build his business. Today (about 5 years later), he's running a highly lucrative middle market investment bank in LA.

So, there are a few take-aways from these two guys. (1) People start really cool businesses at UCLA Anderson and they can do so thanks to the professors, entrepreneurial students, and resources at the school. (2) If you met both of these CEOs you would be shocked at how humble, personable, and down-to-earth they are. They both created highly-profitable, highly-ethical businesses with wonderful, team-oriented cultures. That's the Anderson spirit -- you can create great businesses without being cutthroat; you have great opportunities to start cool businesses built around your own personality (as opposed to working for "the man"); and you can have fun doing it. That's pretty cool.

Why UCLA?

For all those prospective MBAs out there trying to decide where to go next year, let me present my thoughts on UCLA, because frankly, I love this school, and I don't think it gets the respect it deserves. So here we go, why UCLA:

1. People: It's excellence without attitude. It's less of the math nerds or type As and more of the down-to-earth, socially adept people who are total rock stars in everything business related. UCLA is a relatively small school (330 per year), so it's a collegial environment.

2. Education: I didn't pay this much money to have a two-year vacation -- I really want to learn and UCLA is not a place for slackers (I haven't attended any other schools, but I'm guessing the curriculum here is harder than most out there). We have 5 classes in the first quarter, which is extremely taxing, but when it comes recruiting time in January and February, we have a lighter class load (3 courses) and you're ready for your interviews. The curriculum is tough, but worth the effort.

3. Professors: One of my core professors (who has been quoted a number of times in the WSJ and other publications this year) had students over to his posh house twice for dinner and wine/scotch tastings. Our other professors have beers with us and take us on hikes and bike rides. We actually get to know our professors, which I feel is more than you could say at other places.

4. LA: After some tough exams, you want a place where you can let loose. We work hard and we play hard. In my opinion, LA is one of the best places to party in the country. It's a young, fun city with so many options for restaurants, bars, and clubs. Oh, and did I mention the beach? It's 15 minutes away from school. Oh, and did I mention the weather? People were in flip flops and shorts a few weeks ago -- and it's February. Also, because of the location in the nation's 2nd biggest market, many firms have offices here, which makes for easy recruiting and visiting companies. LA is also the main portal to Asia for those interested in businesses between US and Asia.

5. Entrepreneurship: If you want to start a business, you need to come here. You'll learn how to write a business plan, get funding, and you'll hear from so many real entrepreneurs that have done it in the past. You'll also be around so many other people with entrepreneurial instincts that you can build teams and start real businesses.

6. Jobs: Every top firm (ie, Goldman/Merrill/Lehman and McKinsey/Bain/BCG) recruits here. If you have the resume and interviewing skills to get the job -- you're going to get the job whether you're at UCLA or elsewhere. Wharton has more people going to Goldman because (a) it's a much bigger school and (b) a larger percentage of people wanted to go to Goldman. In my class, we have two people with summer offers at Goldman in the IB group, and given our small class size and the relatively small amount of people interested in IB, I think that's a pretty good ratio.

Anyway, those are my thoughts -- for those still waiting to hear from schools are trying to decide between them -- good luck!

Google will eventually come back to earth

I wanted to start with a quick review of Google Earth because it blew me away. Yahoo and MSN are catching up to Google in the search space, but Google keeps coming up with a few ideas that are incrementally better than what its competitors have. Search is a little better. Adwords and Adsense are a little better. Now Google Earth, which I think will replace Google maps at some point gives Google another reason to say, "Hey Yahoo, we're better than you at this too." Google Earth lets you do all of the Yahoo Yellow Pages and Yahoo maps functionality, but it does it in 3D (elevation changes and rudimentary buildings) and it does it by "flying" you everywhere. In other words, if you're following directions from point A to point B, it flys you to ever intersection (without redrawing). It's cool, trust me.

That's actually not the main point of my post, though. I was talking to my VC friend Matt Sandler and we were discussing a few reasons why Google is overvalued right now. First, there's a lack of competition from other stocks -- if you're looking to buy a growing, new, blockbuster tech stock, GOOG is the only game in town. You could buy YHOO, AMZN, or EBAY, but those are such old news. Look at the numbers compared to it's closest peer, Yahoo:

YHOO on the left vs. GOOG on the right
Revenue: 3.99B vs. 3.79B
Profit: 2.28B vs. 1.73B
5 year growth (analyst estimates from Yahoo finance): 30.0% vs. 30.0%
Market Cap: 49.77B vs. 85.23B

If GOOG commands a 25% premium over YHOO, then the stock would be worth $270. Also, based on a quick and dirty discounted cash flow (assuming 31% annual growth for the next 10 years and a 15% discount rate), GOOG is worth closer to $210 - $240. I think GOOG can command a price premium, so $270 is a reasonable number, but not $300.

The GOOG has enjoyed what Yale SOM professor Robert Shiller would call "positive feedback loops" in which there are basically positive cycles fueled by mass psychology that build on one another. With so much positive investor sentiment around this stock, when will this stock stop it's upward momentum? I think only a significant piece of negative news will bring GOOG back to earth, but I can't imagine that's going to happen any time soon as long as they keep coming up with great products and selling so many ads.

Used Books and CDs: eBay is not the Answer

In the process of moving and organizing prior to B-school, I've sold three used books online. I originally considered eBay, since it is the biggest online meeting place of buyers and sellers of everything, but I fear that eBay has far too many sellers and far too many bargain hunters, which drives down selling process to the rock bottom. That's great for the buyers, but there not enough demand to give enough profit to sellers. Enter: Amazon. Amazon's used book selling feature is both easy to use and offered me a lot more profit than eBay ever could have. After posting my books, all of them were sold at my asking price within days. With Amazon, buyers first see the new price then realize they can save a few bucks by buying your book used. That sets their price expectation on Amazon higher than it would have been on eBay. What are the long-term implications? eBay only works when the buy and sell sides are evenly matched. If the sell side is too crowded as it is now, merchants are going to look for other vehicles to sell their wares -- that means more traffic on places like Amazon & Froogle, more ad revenue for Google & Yahoo, and more single merchant web sites. Furthermore, it shows that eBay does not have a monopoly on used goods as people once thought.

Pre-B-school Investing: ETFs vs. Mutual Funds

A lot of people who are just going into business school are rolling their 401(k)'s into IRAs and are now facing a lot of new investment choices that they have never had before. I'm personally going to invest my money in a low-fee, low-maintenance portfolio that I don't have to watch while I'm drowning in coursework. ETFs are perfect for my purposes, since they have lower fees than comparable mutual funds and have some tax advantages over mutual funds as well. Mutual funds can be appropriate for some investors if they're depositing money frequently and want to avoid transaction fees (for example, if you're buying Vanguard funds with a Vanguard account, they won't charge you for every transaction). Since, I'm dumping a lot of money into my account at one time (and my broker only charges $5 per transaction), ETFs are more sensible. I'm a fan of Barclay's/iShares ETFs -- in particular, IJR (small cap index), IJH (mid cap index), IVV (large cap index), and EEM (emerging markets index). I have a high risk tolerance, so you won't see bonds anywhere near my portfolio. Go to the Yahoo! ETF page to learn more about ETFs. Also, if you're looking for a great read, take a look at Random Walk Down Wall Street which helped me formulate a lot of my investment strategy and a book I would recommend to any b-schooler. Disclaimer: I'm not an investment professional, so please consult your own financial planner before investing.

UCLA or Yale?

I was fortunate enough to have been accepted at both UCLA and Yale, and a lot of people have asked me why I chose UCLA over Yale. The decision wasn't easy, even though the schools are very different from one another. I had to talk to a lot of current and former students before I was able to decide. In the end, it came down to a few really basic things.

As a graduate of Yale college, I would have loved to go back to New Haven for my grad degree. Yale is a truly special place with such a vibrant community of bright people. Furthermore, Yale's School of Management (SOM) also has a really strong social responsibility component -- the school's ambition is to educate students whose priorities include business but also include things that benefit society as a whole, whether that's through ethical business practices or environmentally-friendly business or working for non-profits. That aspect of the school resonated with me -- twenty years from now, I'd like to say that I used my talents in a way that helped others or improved society as opposed to simply saying that I made a lot of money making widgets for some big company.

UCLA Anderson on the other hand impressed me in a very different way. After receiving the acceptance email, I attended the Business Plan competition and was blown away by the people, ideas, and execution of the five teams of finalists who presented at the competition. I've always been the type of person who loves to be involved in a variety of different aspects of a project and I've always been more of a person who figures out how to get the job done. These aspects of my personality, combined with my intense dislike for beauracray, will lead me down an entrepreneurial path to some very small business. This is what UCLA excels at, and why I decided to attend. In addition, I plan to stay in California indefinitely, so it was sensible to attend school in the state so I could build a stronger business network here through the Anderson alumni and professors.