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June 29, 2005 


 Q&A: Op2mize Founder Geoffrey Kasselman on Asian Advancement 6/28/2005
The mission of Going Global, which appears on ePrairie on most Tuesdays, is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.

CHICAGO Ė In 2004, Geoffrey Kasselman founded Op2mize, a real estate services firm that bundles facility modeling and computer simulation with corporate services and governmental incentives consulting.

He is currently the president of the Association of Industrial Real Estate Brokers (AIRE) and the speaker elect for SIOR. He is also the immediate past president of the Chicago chapter of SIOR.

International expert Michael Muth sat down with Kasselman for part two of a three-part Q&A on his technology findings from conducting research trips to Asia.

Michael Muth: How can technologies last 50 years when many are outdated in three to five years? Geoffrey Kasselman: The real question is: Can the Internet survive that long in one form or another? Itís also a matter of the longevity of universally acceptable data standards (such as Wi-Fi).

Another primary consideration is the laws of physics. We believe that almost everything will have a unique IP address with the advent of IPv6. Itís essential that these concepts are catered to in the design, construction and operation stages of every project from now on. Flexible but sustainable design will be the norm.

MM commentary: Some of the Asians claim their technologies will last 50 years and Iím not sure I totally buy it. Thereís too much thatís changing too fast for much to last that long.

MM: Do you see building U.S. control centers in the future?
GK: Though theyíre not here now, theyíre coming soon. Thereís one in Chicago thatís not quite a building control center. Nphase has created something along these lines at the GATX building in the Loop. Steve Pazol built it to serve a particular customer (thought he recognizes that it could serve multiple customers).

MM commentary: By the way, Pazol is on the slate for an upcoming Going Global interview.

MM: How can automated security systems be secure with no guards?
GK: I donít recommend eliminating such human resources. Iíd suggest for you to reallocate people to account for the technology. Rather than having 50 security guards, you may only need 12. The others may be redeployed at the command control center.

They complement that with wireless fingerprint scans, iris scans and voice recognition. Guards wonít be stationed at a concierge desk or monitoring video feeds in the basement. They will rove with real-time video feeds on handhelds, which brings about a whole new level of security. There will be historical archives from the digital video cameras, too.

MM: How are homes integrated with workplaces?
GK: Because of the buildable land premium in these Asian locations, mixed-use developments abound and almost all of them integrate public transportation systems into the properties.

The other dynamic is Ė regardless of location Ė building a single-purpose building used only eight hours a day (i.e. an office building) will be an inferior investment when compared with buildings that are active 18 to 24 hours a day.

With the onset of ubiquitous lifestyles, single-use buildings will be a waste. Also, there will probably be a cluster effect for mixed-use properties where one building has the transportation hub and all the other buildings in the area share in that amenity.

MM commentary: Iím a bit skeptical that these mixed-use buildings will catch on here in the U.S. as quickly as they will in other countries. We have too much space and I believe people sometimes like to have distinctly separate home and work places.

MM: Why do you think paying by cell phone has caught on elsewhere but not here?
GK: There are some bureaucratic domains in the U.S. where those who are in control donít want to let go. The retail revenue stream accrues primarily to the vending machine supplier who fills it with content and receives the lionís share from each sale. As soon as you go to a phone-based system, youíre yielding the primary revenue to the phone operator and you essentially become a supplier to them.

In Singapore, it cost about 75 cents as if you plugged coins or used your credit card (except youíd see it as a line item on your monthly e-bill). The phone company collects it and divvies it up with the vendor. The question becomes who controls it and can they agree to share it equitably. To the consumer, the cost is the same there and here. Who gets what out of the unit cost is whatís on the table.

MM commentary: I still believe that cashless micro payments are coming to the U.S. The I-PASS is an example in Illinois.

MM: Where do you hope to get an investment of $100 million?
GK: Our prototype is roughly 350,000 square feet and $100 a foot. Thatís a $35 million project plus retrofit, retenanting, marketing costs and professional fees. While we might be $150 a square foot, the ideal property might prove to be 500,000 square feet.

There are several offers from significant organizations to fund 100 percent of our equity and some of our debt requirements. We havenít committed to anyone at this point. You have to operate in the realm in which youíre comfortable to minimize risk. It also helps to know your competition intimately. Determine what the value proposition is for you and your prospective partners. Finally, determine who owns the intellectual capital that comes from the project.

MM commentary: Though there are differences between real estate investment and raising capital for technology firms (such as the size and scope of the deal), there are many similarities as well.

MM: Are the Asians as concerned about protecting their IP here as we are with protecting ours there?
GK: Itís hard to know for sure. We were stunned when we met the Chinese deputy minister of science and technology in Beijing. He had just brought online one of the smartest buildings on the planet with building automation and green energy. It was built as a showplace for the Chinese government prior to the 2008 Olympics.

When we were received by the minister, he gave us a tour. Nothing was off limits. He said we were the first Americans who had called on him. He received peers from Italy, Switzerland and Canada but never anyone from the U.S. In Hong Kong, the developer allowed us to take pictures despite intense security protocols against visitors and pictures.

While the Swiss building in the United Kingdom didnít want notoriety or attention for all the security and automation features they put in, we were given a tour there. Most real estate developers just want to understand why youíre asking and the quid pro quo is an exchange of best practices. Itís not an intellectual property ownership issue.

MM commentary: While these hosts are happy to show off their latest technologies, theyíd be loath to divulge the guts behind their innovations.

MM: What roles do the government and the private sector play?
GK: While Iím not a government basher and I donít want to stir things up here, I think our governmentís laissez-faire attitude toward proactive technology investment is a major stumbling block to what used to be U.S. worldwide dominance. If we do lose our lead, itĎs due to lack of leadership in tech investment and education. We gained a whole new perspective on this by visiting a few different schools in Asia.

The entire country of Malaysia operates according to the smart school initiative that was put in place for all Malaysian children. There is direct online connectivity between teachers, students, administrators and parents 24/7 with open communication. Thereís no lag time in the lesson plan or the feedback. The parents can go online and see where their students are any time.

In China, we saw digital lesson plans. The students were issued laptops in the second grade. In the fourth grade, you program a Web page about yourself, which then stays with you and gets enhanced as you advance through each grade. By senior year in high school, you can imagine what theyíve done. In Korea, the norm is to attend school or study 18 hours a day. There is shame on students who donít follow this norm. They school over the summer, too, and they all learn five languages.

MM commentary: Education is a very culture-centric institution. While these advances in technology are great for those so inclined, it doesnít lend itself as well toward those who arenít as enamored with technology. While there are advantages and disadvantages with many systems, they often work within the cultural context in which education takes place.

For example, when I lived and worked in Germany, I saw that their educational system is much less flexible than ours but it works for them. You could never implement our system there or theirs here. I suspect it might be the same situation in this instance.

MM: What are the local implications that have come out of your travels?
GK: Weíve changed the way we do business. Weíve gained local credibility from our global perspectives and we feel compelled to communicate the low and highlights from these trips.

Weíve stumbled upon this travel niche on these educational trips. For those who want to see what we saw, weíre going to offer a series of best-practice tours. Weíre going back to Asia in the fall and weíre doing tours to Dubai and Europe. Weíll take 25 to 30 people on each.

MM commentary: Though Iím not sure how he has changed how they do business, learning how the rest of the world does things differently can be a very eye-opening experience. Iíd encourage everyone to make that jump at some point.

MM: Did you learn much Mandarin? How were your interpreters?
GK: Not much. Itís surprising how commonplace English is in the major business hubs in Asia. Most of the kids who have become decision makers speak English. English wasnít an issue in Japan.

All signs are now in English, too. On my first trip, I really felt like I had an authentic Asian experience. On the second trip, we flew United, stayed at the Grand Hyatt and had Starbucks. We didnít have as much of a culturally driven Asian experience. Our trips wonít be culturally oriented as much as others and weíre not going to sell them as such.

MM commentary: While Mandarin Chinese is particularly difficult to learn, itís still worthwhile to learn at least learn the niceties.

Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muthís full biography.

Previous Columns:
Q&A: Op2mize Founder Geoffrey Kasselman on Findings From Asia (6/14/2005)
Q&A: Op2mize Founder Geoffrey Kasselman on Analog, Smart Buildings (6/7/2005)
Q&A: Manpower CEO Jeffrey Joerres on Changing European Regulations (5/31/2005)
Q&A: Manpower CEO Jeffrey Joerres on Comparison Between U.S., France (5/17/2005)
Q&A: Federal Reserve Bankís William Testa on Cautionary, Hopeful Prospects (5/3/2005)
Q&A: Federal Reserve Bankís William Testa on Chicago Business (4/26/2005)
Q&A: Federal Reserve Bankís William Testa on Headquarters, Exports (4/19/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Keys to Outsourcing (4/5/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Outsourcing in India (3/22/2005)
Q&A: Lisle Technology Partners CEO Adarsh Arora on Offshore Outsourcing (3/15/2005)
Q&A: CECís David Weinstein, Kapil Chaudhary on International Experience (3/1/2005)
Q&A: CECís David Weinstein, Kapil Chaudhary on Internationalization (2/22/2005)
Q&A: Brian Briggs of Acclaro on Whether to Outsource Localization (2/8/2005)
Q&A: Brian Briggs of Acclaro on the Complexities of Localization (2/1/2005)
Q&A: Brian Briggs of Acclaro on International Localization Services (1/25/2005)
Q&A: RPXís Robert Okabe, IECís John Janowiak on Global Events (1/11/2005)
Q&As: FastRootís Terry Howerton, Doug Cogswell of ADVIZOR Solutions (1/4/2005)
Q&A: Opportunity Internationalís John Kamperschroer on Partnerships (12/21/2004)
Q&A: Opportunity Internationalís John Kamperschroer on Technology (12/14/2004)
Q&A: Opportunity Internationalís John Kamperschroer on Innovative Financing (12/7/2004)
Q&A: IEC Senior Director John Janowiak on Trade Show Realities (11/16/2004)
Q&A: International Engineering Consortium Senior Director John Janowiak (11/9/2004)
Q&A: Founder John Lee of Chicagoís Hostway on Web Site Localization (11/2/2004)
Q&A: Founder John Lee of Chicagoís Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
Entrepreneurís Guide to International M.B.A. Programs in Chicago (9/28/2004)
Q&A: Prairie Angels Founder Bob Okabe on Diction, International Cities (9/7/2004)
Q&A: Prairie Angels Founder Bob Okabe on International Adaptation (9/1/2004)
Q&A: Prairie Angels Founder Bob Okabe on Managing U.S. Subsidiaries (8/24/2004)
Q&A: Origin Ventures Founder Steven Miller on Investments, Angels (8/17/2004)
Q&A: Origin Ventures Founder Steven Miller on the Canadian Way (8/9/2004)
Q&A: CPCP Founder David Baeckelandt on Multilingual Importance, Mentoring (8/3/2004)
Q&A: CPCP Founder David Baeckelandt on Japanese Disclosure, Due Diligence (7/27/2004)
Q&A: Chicago Pacific Capital Founder David Baeckelandt on Overseas Funding (7/20/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on BP, AstraZeneca Wins (7/6/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on Global Software (6/29/2004)
Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
Q&A: FastRoot CEO Terry Howerton on Blended Chicago Approach (6/15/2004)

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