Rotman School

With a week left before Hult Prize finals at the Clinton Global Initiative's annual meeting, �鶹��Ƶ’s Team Attollo is gaining momentum, finding partners in India and Africa and picking up interest from educational organizations.

The innovation driving all the excitement? That's “Talking Stickers,” the system created by the team to improve literacy for impoverished children around the world.

One of only six teams left from more than 20,000 entrants in the world’s largest student competition on global challenges, the social entrepreneurs developed a handheld scanner called ollo which uses stickers with QR codes to bring words to life through songs, nursery rhymes and short stories. It's been attracting media attention locally and in developing countries around the world where they've been testing the product.

(Listen to the CBC Radio story on Metro Morning.)

If they win the finals Sept. 26, at an event hosted by former President Bill Clinton in New York City, the team gets $1 million in seed capital funds that will go toward building the social startup and putting affordable Attollo devices into the market.

For team members Aisha Bukhari, Peter Cinat, Lak Chinta and Jamie Austin, it’s been a long road since winning the �鶹��Ƶ competition back in December. Between them, the group has three engineering degrees, two PhDs in neuroscience and four MBAs, but they’ve had to learn new skills like how to make a pithy business pitch and how to capture investor and media interest.

(Video below created by REfilms for Attollo.)

Talking Stickers by Atollo from Janelle & Steve Miller on Vimeo.

In March, they won the Hult regional rounds in Dubai. They’ve all left their full time jobs to focus on the startup, going through several reincarnations of their initial idea, absorbing advice from profs and other social entrepreneurs and tweaking their product.

But it’s been worth it for the group. With this year’s competition focused on early childhood development in the urban slum, team members say they feel their Attollo device has a real shot at reducing illiteracy in the developing world.

“Studies show that underprivileged children are exposed to 30 million fewer words by the age of 3 compared to their more privileged counterparts – this has a big impact on their vocabulary,” said Attollo team member Austin.

“By the time these children reach school, this gap widens to the point where they struggle to succeed in school and then later in life. We traveled to India and Kenya, and we found that the concept of the word gap was also prevalent. These children struggle with language and vocabulary development. The good news is that parents can solve the word gap by talking, reading and singing more to their children every day.”

But parents sometimes struggle with illiteracy, too. That’s where the Attollo device comes in.

Easily scalable due to its low cost, the device uses stickers to prompt playback of pre-recorded educational audio, helping to overcome parents’ own challenges with literacy. Parents can record new vocabulary, short sentences or pages from a book in their own voice. They can use the device to complete interactive activities with their child. Or, when a parent is busy working, it can be left in the hands of children to scan stickers and learn from the playback.

As part of the Hult competition, the team has been testing Talking Stickers this summer at schools in disadvantaged neighbourhoods of Hyderabad, India and Mombasa, Kenya. They’ve worked with such NGOs as the Aga Khan Foundation and Pratham, the largest early childhood development NGO in India.

Thanks to those trial runs, Pratham, Aga Khan and Right to Play have signed letters of intent, expressing interest in obtaining several hundred devices and stickers. UNICEF has also expressed interest.

(photo above by Eugene Grichko – Rotman School of Management)

�鶹��Ƶ Faculty of Information Associate Professor Matt Ratto helped with product development. And along the way, staff and faculty from �鶹��Ƶ’s Rotman School of Management and across �鶹��Ƶ rallied to help Team Attollo, with everything from feedback on pitches and presentations to financial support.

“Students and faculty at �鶹��Ƶ know that the challenges we confront as a global community are more intertwined, complex, and social than ever before,” said Vivek Goel, �鶹��Ƶ’s vice-president of research and innovation. “Team Attollo represents the kind of critical thinking, problem-solving, teamwork and ethical and social reasoning that the university encourages and supports in its social entrepreneurs.”

(To learn more about entrepreneurship at �鶹��Ƶ visit �鶹��Ƶ's Banting & Best Centre for Innovation & Entrepreneurship)

Thanks to Rotman School of Management Professor Dilip Soman, the group got a face-to-face meeting with government officials in the state of Telengana. Those officials also want to partner with the group to purchase the devices and stickers for government-run early childhood development initiatives.

“My role was simply to talk about the team's product and potential to the Canadian Trade Office in Delhi and to request their help,” Soman said. “The Canadian Trade Commissioner in New Delhi, Ivy Lerner Frank, has been a great supporter of our work at the India Innovation Institute, and she saw this as a classic example of the kind of innovative social enterprise ideas that need to be supported. Ivy and her office facilitated meetings between the team, and the Telangana government, resulting in the memorandum.”

Team members also participated in an incubator at the Hult International Business School in Boston, receiving mentoring and strategic planning advice.

For this next week, the group is focused on last-minute preparations ahead of the finals on Sept. 26.

After that, they’re working with Autodesk Research, who crafted the device, and �鶹��Ƶ Electrical Engineering Professor David Johns, who is helping the group make the device more compact and affordable. They’re also considering secondary markets for Talking Stickers such as collaborations with consumer packaged goods and medical/pharmaceutical companies to help people around the world who can’t read to comprehend instructions on drugs and other goods.

Attollo members say they're excited to work with �鶹��Ƶ's Dr. Stanley Zlotkin and the Centre for Global Child Health at SickKids Hospital in Toronto to use the Talking Stickers concept to help families understand how to use Sprinkles – a UNICEF child nutrition product. Stickers can be placed on Sprinkles sachets to provide audio instructions on proper product usage when scanned – in any dialect or language around the world.

It’s the work with Pratham that has them the most excited. They see the potential of putting reading devices into the hands of children who can’t afford to go to school.

“The way we’re going to distribute this into our target area is by finding a like-minded partner who shares our mission of impacting underprivileged children in communities we need to serve,” Cinat said. “We think we’ve found such a partner in Pratham. Their mission is to teach and support children who have been left behind. Pratham serves 1 million children under the age of 6 today in India, operating in 21 out of 29 states.”

“Still, there’s over 20 million people not served with any form of early childhood development. That’s the market that together with Pratham we are going to target.”

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Election 2015: when it comes to political ads, it's a mixed bag

sgupta — Mon, 24 Aug 2015 14:14:20 +0000

Election 2015: when it comes to political ads, it's a mixed bag sgupta Mon, 08/24/2015 - 10:14

Alan Christie

Author legacy

Alan Christie

All three main political parties could be doing a better job of getting their message out through television ads, David Soberman says.

A professor of marketing and the Canadian National Chair of Strategic Marketing at the Rotman School of Management, Soberman has worked in marketing management for Molson Breweries, Nabisco Brands and Imperial Oil. Soberman, who analyzed the first leaders' debate for �鶹��Ƶ News, is one of the experts providing analysis and commentary on the election campaign. (Read an interview with Associate Professor Peter Loewen of the department of political science about campaign strategy. Read an interview with Professor Kent Roach of the Faculty of Law on the prime minister's proposed travel ban.)

Soberman watched television ads in his office and shared his reactions with �鶹��Ƶ News.

What is your assessment of the Conservatives’ “he’s just not ready” ad about Justin Trudeau?
I think for a year or so that it did a fairly effective job of raising doubts about Justin Trudeau’s competence and the depth in which he would be able to do the job as prime minister. There was no advertising to counter it. But in the [Maclean’s] debate a lot of people saw Trudeau and have now seen him campaign.

While you might not agree with him or vote for him, people have come to realize that a lot of what is being said in the ads isn’t fair. There is not really any support for it. When that happens, when people see something they don’t really believe is justified, I don’t think the ad achieves its objectives.

The ads make other claims, concerning his views on balancing the budget and his hair.
Before someone is prime minister they’re never ready to be prime minister so that could be a basis for an argument against anybody (including Conservative Leader Stephen Harper in 2006). This issue of balancing a budget: People balance budgets all the time, when you become an adult have to balance a budget. Of course Trudeau hasn’t balanced a budget in a government setting because he hasn’t been in power.

The “nice hair” remark is gratuitous. I am not the greatest fan of attack ads. They work when your opponent has a significant weakness that people have to be made aware of, but when the ads descend to the mud-slinging – and I would say “nice hair” is mud-slinging – I don’t think they play a positive role in the political process.

How do you view the NDP ad about “corruption” in the Conservative government that includes the Senate scandal?
It’s also an attack ad but in contrast to the Conservative attack ads on Trudeau the NDP is actually focusing on things that have happened. People can check to see that these things all happened during the course of the Harper government. The suggestion from the NDP is that if you vote for us this will change.

Another ad with NDP Leader Thomas Mulcair talking about middle-class values and trying to take care of people conveys a more positive message. But most of it could have been a Liberal or Conservative ad, it is so generic. I don’t even know what middle class values are. Work hard, take care of your fellow man? You know what? Most wealthy people work hard and are some of the biggest donors to hospitals and charities in Canada.

I would love to see these ads answer the question: “What are you going to do that is different?” We don’t tend to see that.

What about the Liberal ad in response to the Conservatives’ “not ready”?
That is a very clever ad. [Trudeau] is able to use the Conservatives’ slogan as a basis for his thing, which is that he is “not ready” for people to lose their jobs, not ready to watch people fall further behind, not ready to watch the economy decline. I think that is a good message.

Trudeau’s ad on helping the middle class is nice because he actually talks specifically about taxing the rich to help relieve middle-class taxpayers. What he leaves very amorphous is what exactly he is going to do. Tax the top one per cent more? You don’t want to have the situation in France, where some people are moving to Belgium, Switzerland or Russia. You don’t want to scare your wealthy people away. Still, it’s interesting that while the NDP talks about change [in general], these guys [the Liberals] talk about real change.

What advice would you give the Conservatives?
I would stop the attack ads. Continuing with them makes [Trudeau’s response] more effective. The second reason is that I think Trudeau has shown himself on the campaign trail to be far more competent and deep than the Conservative ads portray. And the third reason is those ads are playing right into the NDP’s hands. If the Conservatives spend heavily to weaken the Liberals, that support is much more likely to go toward the NDP. In many ridings they could actually help the NDP win.

What advice would you give the NDP?
I would go for the jugular on the Mike Duffy trial. I think what we’ve seen is that the PMO’s chief of staff approved a policy that basically deceived Canadians. The idea that the prime minister would have somebody in his office who thinks that deception is OK is worrisome. And they (the Conservatives) are very vulnerable. The NDP or the Liberals could present the facts that have come out in court and ask: When people in the Conservative Party speak, can you believe them?

What advice would you give the Liberals?
They should keep running the ad that has Justin Trudeau saying he is “not ready.” And I think they should probably be a little more specific in how they are actually going to fund the $5 billion he says he is going to give to the middle class. They need to be more specific with their policies and explain why they make sense.

This interview has been edited and condensed for length.

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Election 2015: David Soberman analyzes the first leaders' debate

sgupta — Fri, 07 Aug 2015 09:35:12 +0000

Election 2015: David Soberman analyzes the first leaders' debate sgupta Fri, 08/07/2015 - 05:35

Cutline

“One of the really positive things about this debate... is that the leaders focused on issues and not on personal attacks,” Soberman says.

Alan Christie

Author legacy

Alan Christie

Canadians got their first major taste of the federal election campaign in a two-hour television debate on August 6 that saw Prime Minister Stephen Harper defending himself from attacks by three party leaders over his handling of the economy and the environment.

The Maclean’s magazine debate, moderated by its political editor, Paul Wells, brought Harper, NDP Leader Thomas Mulcair, Liberal Leader Justin Trudeau and Green Party Leader Elizabeth May together on stage for the first time.

�鶹��Ƶ News interviewed David Soberman, a professor of marketing at the University of Toronto’s Rotman School of Management and an expert on political advertising, to get his views on everything from the leaders’ body language to how they dealt with issues important to Canadians heading towards the Oct. 19 vote.

Was there a winner? If so, how did he or she impress you?
I feel that all party leaders did credible jobs of presenting their positions and nobody scored a knockout punch. However, two things happened that I think may change the dynamic somewhat:

Elizabeth May appeared to be a politician in command of major issues and demonstrated understanding that was surprising. Perhaps before this debate, she was more of a “special interest” politician. Her opinion on the environment is clear but she expressed clear positions on other issues.
Justin Trudeau appeared to be more articulate and in command of the issues than many expected. He handled himself in the Clarity Act interchange with Mulcair quite well. More than anything, I think he may have negated the image he had of being incompetent and frivolous because of heavy spending by the Conservatives on attack ads.

Last night was the first time these four people were on stage together. What kind of dynamics were at play? Did you sense any type of body language that revealed nervousness? Was anyone trying to be too earnest?
I think Harper appeared very relaxed and comfortable with the facts. Trudeau was combative but more polished than expected. Ms. May in many ways may be the best classical debater. I think Mulcair was trying to appear prime ministerial and for him this is new. Perhaps he was the most uncomfortable because I felt that he was trying at times during the debate to hold himself back.

There was no knockout blow. These happen infrequently in Canadian politics. Did any leader do anything to knock himself or herself out of the race?
No knockout blows, as I said. I disagree that Trudeau needed a knockout blow to get back into the game. The parties are all very close and the campaign has 10 weeks left. I think in many ways, Trudeau benefits from the fact that Harper was the main focus of attack by the three opposition leaders. Now the Conservatives cannot “guarantee victory” by hammering Trudeau. Harper needs to worry about both major opposition parties.

The focus of the debate was the economy. Did any leader differentiate himself or herself to lead Canadians to think: “This person has a plan to help my family in volatile economic times?”
The debate was quite confusing on this issue as Harper talked about what the Conservatives have done and Trudeau and Mulcair talked about what the Conservatives have not done. The problem that all three leaders have is that it is difficult to explain the details of their plans and how they will be financed. They have not yet figured out a simple way to explain this to Canadians.

For example, the Liberals (Trudeau) talk about taxing the rich more and providing a break to the middle class… but how much? What is the accounting for this? Mulcair talks about increasing the minimum wage as a magical way to give more money to low income Canadians. But many studies have shown that this can also increase unemployment… once again what is the accounting? I think the bottom line is that Harper and the Conservatives are vulnerable here as we are in a recession and we are the only G7 country in this situation. Harper did not articulate a clear plan to address this; most of his comments related to his past record and not the action he will take if elected.

Which leader do you think reached out best to those Canadians outside his or her core voter group?
Probably Elizabeth May. She appeared credible as a person not just on environmental issues but also on other important topics. I also think that Trudeau made some headway in erasing some of the negative halo created by Conservative attack ads. Harper handled the Senate issue (and mess) quite well. I thought Harper would have had a harder time when the Senate came up as a topic. The opposition leaders could have been more aggressive on this issue.

There will be several more debates during the 77-day campaign. At the end of the day, do they really matter? Will Canadians simply look at the leaders and say: “I just trust this person more than the others?”
I think they matter a lot as they help Canadians understand the leaders better and also understand the issues. One of the really positive things about this debate in relation to political debates in the United States or France, for example, is that the leaders focused on issues and not on personal attacks. The most important thing in democracy is that people can make informed decisions. My wish is that political advertising would focus more on issues and less on attack ads. Attack ads generally do little to help voters understand the issues and the alternative perspectives on these issues provided by each party.

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On the road to the Three-Minute Thesis (3MT)

sgupta — Thu, 26 Mar 2015 11:48:26 +0000

On the road to the Three-Minute Thesis (3MT) sgupta Thu, 03/26/2015 - 07:48

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Sandra Barbosu and Hila Fogel-Yaari practise for the competition (all photos by Eugene Grichko)

Rory McKeown

Author legacy

Rory McKeown

Subheadline

Making years of research interesting and intelligible for non-experts in less time than it takes to sing a pop song

It’s a dramatic question: “If you were hit by a bus, and crawled into the room at the contest, bleeding and dying, what’s the one sentence you would use to make your point?”

The image is intense but for Sandra Barbosu and Hila Fogel-Yaari, PhD candidates at the University of Toronto’s Rotman School of Management, devising an answer is all part of hammering out their presentations for the Three Minute Thesis (3MT) competition.

3MT began life at the University of Queensland, intended as a forum to help train doctoral students to explain their research in a clear and concise manner to non-expert audiences.

The concept is simple: explain years’ worth of research in three minutes, with a single static slide, and no props. The idea quickly spread across Australia and beyond, with competitions springing up around the world. The Canadian iteration, run by the Canadian Association for Graduate Studies, sees competitors from Victoria to St. John’s competing within their universities, and then at regional finals (at Thomson Rivers University, Western University and Concordia University). Top performers in each region are then invited to present at the association’s annual conference in Calgary in the fall.

Fogel-Yaari and Barbosu, practising in front of each other and a few colleagues, are working to ensure that they’ll be chosen to represent �鶹��Ƶ. For two years running, �鶹��Ƶ has taken the provincial title but in each case a life sciences student was crowned champion.

“I spent a lot of time focusing on my overall goal,” last year’s winner Daiva Nielsen said. “I looked at the bigger picture and thought about the most important point to get across.”

The discussion in the small room is intense and ranges from encouraging – “You just lit up when you started explaining the importance of innovation” – to brutally frank: “You only explained your work starting at the two minute and thirty seconds mark. I want you to rework this completely!”

Methodologies are questioned; the structures of presentations are tweaked, adjusted or completely scrapped and replaced.

Fogel-Yaari, who will begin a tenure-track faculty position at Tulane in the summer, is an expert on the importance of innovation in corporations, and her thesis examines the relative importance of CEO personality and information asymmetry between managers and shareholders in driving innovation.

“In the literature, researchers focus on one or the other,” she explains. “I am one of the first to look at how they are related.”

Something is lacking, though; the idea remains abstract, until she begins talking about the importance of innovation itself, citing a 2005 paper that found that each additional patent citation could add three per cent to the value of the firm, and her colleagues pick up on her enthusiasm. “You’ve got to let that energy transmit to the audience – it’s infectious!”

Barbosu’s research into film production has involved eight months of laboriously combing through data for 60,000 titles on Amazon’s streaming service to analyze the profitability of movies that span multiple genres.

“Can you choose a single studio and two films to use as concrete examples?” she is asked. Pencils scribble furiously as everyone in the room takes notes to revise for yet another iteration of the presentation. “You mention game theory, but only once. Should that be expanded or cut?”

One thing everyone in the room agrees on is the importance of the skills developed by the competition.
“It’s vitally important that our graduates can explain the real-world impact of their research,” says Alyson Colón, administrator of the Rotman PhD program, who organized the practice session.

As the session winds down, the candidates leave the room, armed with their notes, and talking animatedly about their presentations. The university-wide winner won’t be crowned until April 8, but if all contestants are taking it this seriously, says Colón, the final round will be electric.

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Winter months SAD for U.S. Treasury securities, study reveals

sgupta — Mon, 16 Mar 2015 10:46:48 +0000

Winter months SAD for U.S. Treasury securities, study reveals sgupta Mon, 03/16/2015 - 06:46

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(photo by Daniele Zanni via Flickr)

Ken McGuffin

Author legacy

Ken McGuffin

Subheadline

“In the world of Treasuries, that kind of a systematic difference is huge,” says Rotman prof

The best time to invest in U.S. Treasury securities may be spring, thanks to seasonal variations in investor risk tolerance linked to depression, new research says.

A team of finance researchers found that the monthly return on those securities showed an average swing of 80 basis points between October – when returns peaked – and April, when they bottomed out.

“Maybe it seems like a small number, but in the world of Treasuries, that kind of a systematic difference is huge,” says study co-author Lisa Kramer, an associate professor at the University of Toronto Mississauga, who is cross appointed to the University’s Rotman School of Management. (Read more about Kramer and her research.)

She and her fellow researchers found that the fluctuation was linked to seasonal depression, called seasonal affective disorder (SAD) in its severest form. That was true even after controlling for other possible explanations, such as investors using Treasury securities as a hedge against stock market volatility, Treasury debt supply fluctuations, auction cycles, data mining, and even bad weather.

Medical evidence has shown that up to 10 per cent of the population experiences SAD and that most people experience more depressive feelings in the fall and winter.

The study's finding may be hard to accept, given that Treasury markets are known as places for larger institutional investors with experienced and sophisticated advisors who are not influenced by everyday human emotions. But maybe it's time to recognize that even high-level portfolio managers are people too, says Kramer.

“Maybe they're not clinically-depressed and feeling the impulse to crawl back into bed,” she says, “but my own research suggests that they're not as buoyant during some seasons of the year and it might not be very noticeable to an individual, but there do seem to be really broad effects.”

Kramer co-wrote the study with Professor Mark Kamstra of York University’s Schulich School of Business and Professor Maurice Levi of the Sauder School of Business at the University of British Columbia. It builds on Kramer's previous work, such as her 2011 paper, “This Is Your Portfolio On Winter,” identifying that people with SAD shun financial risk-taking during seasons with diminished daylight and that this effect is strong enough to influence financial markets.

The paper is being published in a forthcoming issue of Critical Finance Review.

Ken McGuffin is a writer with the Rotman School of Management at the University of Toronto.

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Sick of real estate bidding wars? Sadly, no end in sight, study finds

sgupta — Tue, 03 Mar 2015 11:34:55 +0000

Sick of real estate bidding wars? Sadly, no end in sight, study finds sgupta Tue, 03/03/2015 - 06:34

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(photo by Daniel Kuhn via Flickr)

Ken McGuffin

Author legacy

Ken McGuffin

Topic

Frenzy, frustration and disappointment are what home buyers have come to dread about real estate bidding wars.

They'd better get used to it, suggests a new study. It shows that despite some drop-off over the last decade, homes sold through bidding wars have still substantially increased their share of sales over the last two decades.

Once a rarity – representing between 3 and 4 per cent – homes sold through bidding wars tripled their market share during the real estate boom between 1995 and 2005, says the paper by two professors at the University of Toronto's Rotman School of Management.

The subsequent bust saw some drop-off. But bidding war sales still represent twice as much of market share as they used to. The study is the first to measure and analyze the rise of bidding wars in the North American market and won the 2014 Edwin Mills Award for best paper in Real Estate Economics.

"Bidding wars seem to partly be about the boom. But they also seem here to stay," says William Strange, a professor of business economics who holds the SmartCentres Chair of Real Estate at the Rotman School, who co-wrote the paper with Lu Han, the Petro-Canada Associate Professor of Business Economics.

The researchers used buyer and seller data from the U.S. as well as buyer surveys in Canada for the study. They found that although an increase in bidding wars was correlated with economic and housing booms, that rise was not consistent from one jurisdiction to another. Washington, D.C. had one of the highest bidding war sales rates, with 29 per cent of all home sales during the boom. In Houston however, that rate was just over 11 per cent, even though the metropolitan area also benefited from the boom.

Greater restrictions on land use – preventing urban sprawl and therefore limiting housing stock – a higher use of the internet in the home search process and markets where more buyers make decisions based on emotion instead of economics were all associated with higher rates of bidding war sales. There was also a relationship between bidding war transactions and the use of real estate agents, the study found.

"The single biggest implication is that bidding wars could conceivably be part of a general process of overheating and irrationality in housing markets," said Strange. "When that's present, it can create a lot of risks, especially with a heavily indebted population."

The paper was published in a recent issue of Real Estate Economics.

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Inside the Creative Destruction Lab interviews

sgupta — Wed, 18 Feb 2015 07:59:54 +0000

Inside the Creative Destruction Lab interviews sgupta Wed, 02/18/2015 - 02:59

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Startups pitch themselves in 'speed dating'-style interviews in Desautels Hall

Brianna Goldberg

Author legacy

Brianna Goldberg

Subheadline

A look inside the application process for one of �鶹��Ƶ's startup accelerators

It’s a race against the clock as Chris McIntyre’s legal pad fills with details about the startup founders in front of him.

The table loaded with applications shakes as he writes, wobbling from the force of his fast-moving pen and the twitching knees of one of the anxious interviewees.

“Help me understand your target customer,” says Megan Dover, McIntyre’s interviewing partner. She’s mining the company for facts that could either reveal their startup to be one that might fold next week or, perhaps, hold the potential to transform the tech landscape and even the North American economy.

Dover’s eyes dart up to the alarm, projected on a huge screen, counting down the nanoseconds left in their 15-minute window. Time is short but she and McIntyre are on schedule.

They’ve honed their speedy interview process over the morning of grilling startups as part of their MBA responsibilities. Together they form one of more than a dozen teams of Rotman MBAs taking the Creative Destruction Lab elective as part of their degree. Today’s task: interviewing potential ventures.

The few startups that make it into �鶹��Ƶ’s prestigious Creative Destruction Lab accelerator will gain access to intense, ongoing mentorship from Rotman professors such as Ajay Agrawal and a group of influential Canadian business leaders including Daniel Debow, co-founder of Rypple, Tony Lacavera, former CEO of Wind Mobile, Geordie Rose, founder of D-Wave, and others.

(Read about �鶹��Ƶ entrepreneurship and accelerators)

The companies vying for entry are diverse; among the hopefuls today are a medical biotech startup, a developer of pet monitoring devices and maker of wireless phone charging stations, to name a few. If there’s one common theme, it’s that the entrepreneurs are all nervous, excited, and often forget to share the most important details of their pitch until the last few moments. (Dover and McIntyre pictured above)

The MBA students performing the interviews are focused and intense but make sure to call the founders by name and demonstrate genuine interest while madly investigating the strength of each company’s potential.

Throughout the sun-filled Desautels Hall, 54 teams of founders have been rotating from table to table, hoping to convert MBA duos like McIntyre and Dover into believers that their venture should be in the minority selected for the next cohort of Creative Destruction Lab – and they have to do so before their 15 minutes run out.

“The good thing about having this kind of ‘speed dating’ is it helps startups refine how they communicate to people,” says Tom Lowden, an associate director at the Lab. “MBAs have knowledge of the company’s application form, plus anything they’ve scoured over the internet, and they’ve got a business mind so they’re going to be asking those kinds of questions. It helps companies feel out their pitch.”

The groups being interviewed were whittled down from an initial pool of 135 applicants, says Noopur Parmar, another of the lab’s associate directors.

But convincing one of the interviewing duos isn’t enough: after today, the MBAs will debate each other until they agree on the 25 companies going on to the next stage.

Those companies will still have to impress the “G7,” a group of seasoned entrepreneurs and industry leaders who serve as coaches – and, often, investors – before they make it into the final cohort of startups accepted into the program. (Pictured: Ted Livingston, G7 Fellow and founder of Kik Interactive, giving advice at a Creative Destruction Lab meeting with startups)

So long as the startups are able to meet business development ‘milestones’ set out for them by the G7, and continue to show potential for growth, they’ll keep earning face time with the mentors until the program wraps in June.

McIntyre, Dover and the other MBAs conducting interviews are fitted in suits and ties, skirts and heels – a range of formal office clothes. The founders on the other side of the tables wear t-shirts and hoodies, flannel button-downs with sleeves rolled up – carefully casual.

The plaid-shirted young man speaking to Dover and McIntyre now describes his company’s approach to market risk, team dynamics and its aspirations for growth. His two co-founders are silent. They smile occasionally. One tugs at his collar, the other shakes his leg.

“One minute left, one minute left,” Lowden’s voice comes over the PA system.

McIntyre turns his attention to the two quieter, fidgeting founders, asking, “What’s an example of something that would make you guys walk away from this company?”

One laughs, explaining that the group are long-time friends; their friendship and respect will keep the business together.

Dover follows up by digging deeper into team dynamics.

“You guys are friends, but how do you make decisions – important decisions? How do you resolve an issue when you disagree?”

Later, she and McIntyre explain their framework:

“All the interview teams are using their own rubric or process or method for evaluation. There’s no standard,” Dover says.

“For us, the order of magnitude of importance is: people, product and market,” adds McIntyre.

Companies who make it into the program can sometimes crack under the pressure, and others find they simply don’t want to pursue the ‘milestones’ set out for them by the G7. Not all startups that begin the Creative Destruction Lab program will graduate at the end of its term in the spring. And that doesn’t necessarily mean they’ve failed.

But ventures completing the process leveraged the program’s experience and connections to launch their companies into international headlines and new markets. Nymi (formerly Bionym) and their biometric wearable wristband called the Nymi Band have been profiled in the New York Times, The Economist and beyond. Y Combinator invested in the smart keyboard software developed by Whirlscape (pictured right). And DJ Armin Van Buuren is already using Thalmic Labs’ Myo armband as part of his live performances across the globe. (Read more about �鶹��Ƶ startup success stories)

“We’re trying to look for things that are going to be significant,” says Lowden. “The Lab was created for the sole reason of creating massively scalable companies. Sometimes the ventures have an idea of how they can do that, but other times they have a really neat technology but aren’t sure how to connect it and grow it within a market – that’s when we provide guidance to create that massively scalable company. Working with the G7 they can start to see that vision a lot clearer than they did before.”

They also get a few free sets of helping hands as their business moves through the accelerator’s rigour.

McIntyre, Dover and the other MBA students taking the Creative Destruction elective do more than interview potential startups for entry. Through the course they’ll assist teams selected for the Creative Destruction Lab by providing research and analysis – basically, free assistance.

And, since many of the founders are coming from research or tech backgrounds, the MBAs can offer the perspective of business acumen – while testing the waters of entrepreneurship themselves.

“I would love to be an entrepreneur, but it’s just having the guts to do it,” says Dover, who works at a corporate job full time while completing her MBA. “That’s why I respect these people so much: they have so much courage. It’s hard to turn them down.”

Brianna Goldberg writes about entrepreneurship and produces the cities podcast for �鶹��Ƶ News.

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Remembering Joseph L. Rotman (1935-2015)

sgupta — Tue, 27 Jan 2015 16:06:40 +0000

Remembering Joseph L. Rotman (1935-2015) sgupta Tue, 01/27/2015 - 11:06

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Joseph Rotman, a leading Canadian businessman, philanthropist and one of �鶹��Ƶ’s greatest champions, has passed away at age 80

Joseph Rotman once said, “Science empowers us; the humanities teach us to use that power wisely.”

Mr. Rotman, who was one of Canada’s leading innovators and philanthropists, died in Toronto on January 27th, just weeks after his 80th birthday. He leaves a great legacy in a wide array of fields, including business, health care, the arts and higher education.

“The University of Toronto, and indeed all of Canada, has lost one of its greatest champions,” said University of Toronto President Meric Gertler. “Joseph Rotman believed that each of us has a responsibility to help build civil society. He had great faith in young Canadians, in their eagerness and ability to lead the way in that cause. And he was supremely confident in Canada’s ability to compete and to contribute on the global stage.”

Mr. Rotman obtained his master of commerce from �鶹��Ƶ in 1960 after receiving his B.A. in philosophy at the University of Western Ontario in 1957. He spent another two years studying business and economics at Columbia University and started his business career in 1962.

Tiff Macklem, dean of the Rotman School of Management, said Mr. Rotman “was a visionary who inspired confidence in a generation of Canadians to see themselves not just as business people and entrepreneurs, but as global leaders. He wanted Canada to be an international player, and he wanted the Rotman School of Management to lead the way. And I believe he succeeded.” (Read more on the Rotman School of Management's website .)

Mr. Rotman and his family had deep roots within the University community, and a long history of volunteerism and involvement with the University of Toronto.

In 1993 he and his wife Sandra made a gift of $3 million through the Rotman Family Foundation towards the construction of a new state-of-the-art facility at the �鶹��Ƶ’s business school. Since that time, the Rotmans have given a total of more than $42 million to the institution. The Rotman School of Management, which is named in his honour, has become one of the most innovative business schools in the world.

Roger Martin, former dean of Rotman, said Mr. Rotman “had clear objectives for the school. He believed we needed to take a holistic view of business education. We call it integrative thinking. His enlightened perspective helped vault our school forward, in a world where you need to be at the top of your game when competing in a globalized economy.”

Mr. Rotman received many awards for his volunteerism, including a Lifetime Achievement Award from Life Sciences Ontario in 2012. He advocated for life sciences research excellence and the biotech industry, serving in several leadership roles at leading health care institutions. Mr. Rotman was also passionate about the arts, serving as the chair of the Canada Council for the Arts. In recognition of his commitment to higher education, Mr. Rotman received honorary degrees from �鶹��Ƶ (1994) and Western (2009). Most recently, he was an honorary chair of �鶹��Ƶ’s Boundless campaign and was appointed chancellor of Western University in July 2012.

David Palmer, vice-president advancement of �鶹��Ƶ, said, “Joe Rotman was a visionary and passionate champion of higher education and research. He served this country and his alma mater admirably – his leadership inspired innovative solutions and positive change on some of the most pressing social challenges of our time.”

For the next several days, from 8:00am to 8:00pm, a memorial book for Joseph Rotman will be available for individuals to sign in the Fleck Atrium of the Rotman School.

Alternately, you may sign the electronic memorial book here.

For funeral information, please click here.

To honour Joseph Rotman's memory, the Rotman family has requested that charitable donations go to the Joseph Louis Rotman Scholarship Fund at the Rotman School of Management.

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Want to kickstart the Canadian economy? Try "indovation", says �鶹��Ƶ prof

sgupta — Mon, 26 Jan 2015 09:11:25 +0000

Want to kickstart the Canadian economy? Try "indovation", says �鶹��Ƶ prof sgupta Mon, 01/26/2015 - 04:11

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Professor Dilip Soman heads up �鶹��Ƶ's India Innovation Institute

Terry Lavender

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Terry Lavender

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Dilip Soman explains how necessity can be the mother of innovation

University of Toronto president Meric Gertler is visiting India from January 27 to 31, on his first visit to south Asia since becoming president.

While in India, Gertler will co-host a workshop on Universities in Urbanization: Building Healthy, Sustainable & Innovative Cities with the Indian Institute of Technology-Bombay, discuss cities and urbanization with India’s largest and oldest business organization, and sign a Memorandum of Understanding with Tata Consulting Services, the second largest IT service provider in the world.

�鶹��Ƶ has strong ties with India. More than 600 students from India are studying at �鶹��Ƶ – the second largest number of international students after China. Hundreds of �鶹��Ƶ alumni live in India and �鶹��Ƶ researchers collaborate both formally and informally with Indian colleagues.

As the president gets ready for his trip to India, �鶹��Ƶ News explores some of the many connections between the University of Toronto and India.

Canada can learn a lot from “indovation”, says Dilip Soman, Rotman marketing professor and head of �鶹��Ƶ’s India Innovation Institute.

The term is a portmanteau of the words “Indian” and “innovation” and it means taking existing constraints – such as a shortage of funds or raw materials – into account when developing a response to actual problems.

Indians – and people in other countries of the so-called Global South – innovate by taking everyday materials and turning them into something new. “Frugality is at the essence of it,” Soman says. “In India, unless you can drive down costs, your idea is a non-starter.

“For example, mobile banking. That’s a classic ‘indovation’. It came about as a response to a particular problem, and it was developed in India and adopted in the west,” says Soman.

Soman, who grew up in India, has taught at Rotman since 2003 and headed the institute since its inception in 2011. He’s eager to point out other ways in which the west can learn from India.

“Look at health care. There’s a company in India called mQure – it’s basically a service where a doctor in rural India can upload your health records to a server via text message,” he explains. “The health-care market there is so fragmented, the chance that you’ll see the same doctor twice are close to zero. Having that medical history makes a massive difference. And the technology is so simple and so frugal.

“And Canada – which has many rural, far-flung areas, could import something like mQure where you don’t have to rely on high-speed internet but can use simple text messaging instead.”

He gives another example: corporate organization. “Look at Procter and Gamble. They have a head office in Cincinnati and they have manufacturing plants somewhere else. They make all their shampoo in one place and put it on trucks and send it all across the country. But in the Indian model, you’d have local businesses all over the country that would manufacture the shampoo to the parent company’s specifications, so you wouldn’t have to do any transport and packaging.”

The India Innovation Institute was set up by former President David Naylor who was concerned that �鶹��Ƶ’s many India-related research and teaching was being done in isolation, Soman says. Jointly run by �鶹��Ƶ’s Rotman School of Management and the Munk School of Global Affairs, it also includes researchers and students from other faculties, such as engineering and medicine. Its four areas of concentration are research, community engagement, curricula and accumulating a database of papers and research on India.

“Right now we’re working on developing a dataset on reverse innovation; the idea that innovations that have developed in the global south can be scaled back to the western world,” Soman says. “We have white papers on several topics: crowd-funding, agriculture, and retail and investment opportunities. The goal is to build up a database of information that both researchers as well as practitioners can use.”

Outreach is important, Soman says, and the institute has organized several lectures and seminars on topics such as the Indian elections, innovation management and the changing face of India – the entire spectrum in terms of Indian-related activities. The free talks attract audiences of 150-200 people, Soman says. And the institute also works with outside communities – it recently helped develop an India-related lecture series in Cobourg.

A behavioural scientist by training, Soman is interested in using insights from consumer psychology to help people help themselves. Here, again, he thinks Canada can learn from India.

“In the western world we have this very stylized way of thinking about what financial well-being is – it means you have a bank account, you have a retirement fund, you have financial assets and so forth. But I was in India about eight years back and I was talking to a farmer who had absolutely none of these things and I said, aren’t you worried about retirement? And he said, ‘No, I have four sons. Why would I worry?’ And it forced me to think about what the fundamental model here is. Perhaps we in the West should start thinking about developing models of financial well-being that embed the family in it, that embed social structures.”

Terry Lavender writes about global and international issues for �鶹��Ƶ News.

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Beware sudden, unexplained jumps or drops in a stock's price

sgupta — Fri, 10 Oct 2014 10:16:40 +0000

Beware sudden, unexplained jumps or drops in a stock's price sgupta Fri, 10/10/2014 - 06:16

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(photo by Andreas Poike via Flickr)

Ken McGuffin

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Ken McGuffin

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Rotman School

Business

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Dramatic moves bode ill for the long run, researchers say

What should investors make of sudden jumps or drops in stock prices that occur for no apparent reason?

A new study by University of Toronto accounting professors that focused on extreme positive and negative price shocks, found about half are unaccompanied by earnings surprises or any other news that would account for them.

The research, in the current issue of the American Accounting Association journal, The Accounting Review, goes on to reveal that the effect of these price shocks is likely to be more than temporary. For stocks that experience big unexplained drops, cumulative returns over the following year are about six per cent less than those realized by shares of a control group of firms.

Interestingly, the results for stocks that enjoy big unexplained jumps are considerably worse – with returns about 13 per cent below that of controls.

In the words of the new study, "price shocks are followed by significant and long-lasting abnormal returns [that] are asymmetric – return continuation following extreme negative price shocks and return reversal following extreme positive shocks."

As for "price shocks with news disclosures, compared to those without accompanying news, [they] are followed by weaker downward drifts. This evidence suggests that reduction of information uncertainty weakens disagreement-induced overpricing."

Still, even here, the stock returns lag over the course of the following year compared to controls – by about four per cent in the case of negative shocks and seven and a half per cent in the case of positive shocks.

In sum, “individuals who chase stocks that have recent large price shocks are likely to suffer substantial losses," concludes the study by associate professor of accounting Hai Lu and associate professor of finance Kevin Wang, of �鶹��Ƶ's Rotman School of Management and Xiaolu Wang, a doctoral recipient from Rotman who is now at Iowa State University.

The study is particularly surprising in two ways. As the authors observe, its focus on price shocks that are unaccompanied by news events challenges conventional beliefs that "no-news price shocks have no clear informational content and represent noise to investors. From this perspective, such shocks have no implications for future returns and are, therefore, unimportant... [W]e show that no-news price shocks are important because they are followed by significant and long-lasting negative abnormal returns."

Further, the paper's findings seem to contravene prior research which suggests that long-term price drifts in the aftermath of earnings surprises tend to be in the same direction as the surprises – upward for positive surprises and downward for negative ones.

What, then, to make of the marked downward drift following positive price shocks?

"Our results suggest that sudden price shocks that occur for no apparent reason are a sign of disagreement among investors about an affected company's fundamental value," said Lu. "Because of constraints on short-selling, with the great majority of mutual funds shunning it entirely, the pessimism characteristic of shorts tends not to be fully expressed in markets. A positive shock, then, may be a kind of bubble, which, as bubbles tend to do, deflates in the course of time, turning an unexplained jump in price into a long-term investment loss."

The professors gauged short-selling constraints by the number of mutual funds that owned company shares. Since most funds have charters that prohibit short-selling, those with negative opinions of a stock sit on the sidelines, their pessimistic valuations not registered in the stock's price and their absence in large numbers begetting price inflation in the run-up to shocks. Thus, downward post-shock drifts are most pronounced where fund ownership is low. Returns of stocks in the bottom third of mutual-fund ownership lagged those of controls by 12 per cent one year after positive shocks, while those in the top third trailed controls by only four per cent. The lag difference was equally striking following negative price shocks: 6.9 per cent versus approximately zero.

The paper's findings emerge from an analysis of stock price shocks on the NYSE, AMEX, and NASDAQ over the 27-year period 1980 through 2006.

Lu and colleagues found, as anticipated, that price shocks were associated with upsurges in unexpected volume of daily trading, which was on average 43 per cent higher during the three-day shock than during the 50-day pre-shock period. Research has equated unexpected volume (as distinct from volume attributable to liquidity factors or to sheer price-change magnitude) with disagreement among investors. Over the course of the year following shocks, unexpected volume receded as investors reached a consensus on the value of firms.

Interestingly, convergence was not principally due to news disclosures over this time. The professors "do not find evidence that the opinion divergence at price shocks is resolved by subsequent news events," a finding consistent with earlier research showing that "the absence of news reports and the passage of time often contain important information, and investors incorporate this information into their valuation gradually."

What accounts for convergence? While conceding that the exact cause is still unclear, the authors surmise that "one possible explanation is that diligent information searches by investors lead to gradual uncertainty resolution. Alternatively, initial investor optimism may fade when patience runs out in the absence of exciting news or a price run-up."

Entitled "Price Shocks, News Disclosures, and Asymmetric Drifts," the study is in the September/October issue of The Accounting Review, a peer-review journal published six times a year by the American Accounting Association, a worldwide organization devoted to excellence in accounting education, research, and practice.

Ken McGuffin is a writer with the Rotman School of Management at the University of Toronto.

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