HARVARD BUSINESS SCHOOL
How urban tech is changing
Whatâ€™s the future of the MBA?
CAN UBER SURVIVE?
The ride-sharing firm fights back
The next billion dollar business?
HOW TO COLLECT ART The secrets of making money and building a collection
MAY ISSUE 137
The business of life & living
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MAY ISSUE 137
The pros and cons of investing
How will we live in the future?
A slice of history in the heart of Vienna
WHAT TO PACK
A beautiful canal house in Amsterdam
From London to New York, weâ€™ve got you covered
The best products money can buy
The chef aiming to revolutionise Indian cuisine
FOOD & DRINK
Cars celebrated at the Cartier Foundation
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MAY ISSUE 137
HOW TO COLLECT ART
Insider secrets on how to start a collection and make money from art
Chief executive Jasper Hope on how the opera is making a mark on the city
CAN UBER SURVIVE?
The ride-sharing firm looks to be in trouble. Can it confound its critics?
HARVARD BUSINESS SCHOOL
Long considered the best business school in the world, can it change with the times?
From Tupac to Sinatra, we examine why holograms could be the future of entertainment
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MAY / FINANCE
Liquid assets Andrew Rosenbaum explores the world of wine investment
hether or not you enjoy wine at the table, investing in it is worthwhile. Among alternative investments (art, jewellery), buying great wines offers one of the most substantial returns on capital. The return on wine is 267 per cent over 10 years and 24 per cent over one year – better than almost all alternative investments, except classic cars. It is also better than the annual return on the Standard & Poor 500 stock market index (16.52 per cent) or the 10-year return (7.31 per cent). “Wines fit very well into a diversified investment portfolio,” says professor Philippe Masset, a wine investment expert at the Ecole Hotelière de Lausanne. “This is why professional investors increasingly consider it as an alternative investment vehicle.” But investing in wine is a bit more complicated than a few clicks on a brokerage site to buy into an index. It is not so much a matter of choosing wines but down to the fact the number of investment quality wines is quite
small (although it is possible to invest in others if you believe in them and are willing to take the risk). The wines have to be sourced correctly – which requires an understanding of how the market works – stored properly and you have to hold them for the right amount of time in order to get the best value from them. It is not necessary to drink wine in order to invest in it but that is how most collectors get started – buying cases of the best wines, drinking some and selling some. If you drink fine wine, you have almost certainly arranged a temperature-controlled, vibrationfree cellar to store it. Wine sold to professionals and collectors must be stored properly and it is possible to ruin a fine Bordeaux by allowing it to get too hot. If you do not drink wine, the safest alternative is to have a professional store the wine for you. Almost every vendor of toplevel wines, whether in London or Milan, will offer this service. The vendor will also provide a guarantee the wine has been stored properly and that will support a top price.
Wines ranking as what an asset manager would call investment quality are the top-level Bordeaux and Burgundies from France and the so-called super Tuscans from Italy (blends of the Tuscan Sangiovese grape, champagnes and other varieties made by the best winemakers in the world into complex reds), among others. These are the wines included in the most important index of wine prices, the Liv-ex. These wines are sold at the top auctions all over the world and are most likely to retain value. It is important to understand prices are set by dealers (these are the prices on the Liv-ex) and by auctions. Take the example of
great Bordeaux, of which Château Lafite Rothschild is probably the most prized and highly priced wine in the world. Even for the top quality wines, the price can be volatile but not in the long term and a top Bordeaux will last at least 20 years. What happened to Bordeaux was that between 2005 and 2010 demand from Asia, particularly from China, drove prices sky-high. In 2007, a Parisian friend complained to me that he had wanted to buy a bottle of Lafite Rothschild for his father’s 60th birthday but that the prices were way beyond what he (an investment banker) could afford and even if he’d had the money,
LAFITE ROTHSCHILD Price in euros per bottle
2001 596 2008 662 2010 437 2016 1,589 Source: Vinfolio.com
the wine was sold out from all the vendors anyway. Then, around 2010, Chinese buying slowed and many Asian investors decided to look at Burgundies and Super Tuscan wines instead. Bordeaux prices plummeted for a short period but have since come back. Investing in wines on the Livex 50 or 100 indexes remains the surest of all possible wine investments. And there will almost certainly be a buyer ready for your investment if you stick to these wines. This is the part of the market that stays liquid in the sense that there are always purchasers. This is also why, although you might wish to invest in that fabulous South African merlot you loved in Cape Town, there might not be anyone to buy it from you when the wine is ready to drink in five or 10 years. People who do not drink wine often wonder about how a bottle can ever be so good as to be worth $1,000 or more. Also, doesn’t wine from one year differ from other vintages? Certainly and vintage has a lot to do with price. Look at Lafite Rothschild, for example. Wine has been made on the Pauillac (Medoc) region property for more than 1,000 years. In the 17th century, the Ségur family organised the vineyards and raised the quality of the wine, so that it became the favourite of King Louis XV. The Rothschild family took over the estates in 1868 and have maintained the highest level of quality since. Wine quality is based on place, water, culture and the skill with which the wine is made. At Lafite Rothschild, the soil is a thick layer of gravel with sand, clay, marl and limestone and the vineyards are placed on the rolling slopes. These are nearly perfect conditions for the cabernet and merlot grapes that the wine is made from.
MAY / FINANCE
In a great wine year, such as 2009, the weather stays warm and sunny until late autumn and the nights are cool The best oenologists in the world will be flown in to Bordeaux (some are already there) to turn the LafiteRothschild grapes into wine, watching over every aspect of its fermentation and barrelageing. All of this explains why connoisseurs will pay so much for a bottle. The one factor that cannot be controlled is weather but in the Bordeaux region, there is a great deal of sun with temperatures never too hot and only rarely too cold, from the point of view of growing grapes. In a great wine year – 2009, for example – the weather stays warm
and sunny until late autumn and the nights are cool so the grapes do not have to be harvested until quite late. As wine critic Robert Parker says: “This is why the 2009 vintage was probably one of the greatest in 30 years.” Obviously this affects the price of the wine, although that can change radically as the vintage matures and its deeper qualities emerge – or not. A wine investor must be aware of the quality of the vintage year he or she is purchasing. While the price will appreciate over time, the bottle will be worth much more in 10 years if it is from a better vintage year.
Lafite Rothschild’s vineyards are on rolling hills, the perfect conditions for the grapes
Once you have decided on the wine you want to invest in, you have to choose whether to buy a vintage year already bottled and in the warehouse or, to get the best value, right from the vineyard as the wine is being made. The best value in wine investing is obtained when you buy the wine before it even exists amd is still being made. This is called buying en primeur and it obviously involves a certain level of risk about how the final product will age. But the great advantage is that very low prices can sometimes be had and great wines that are very difficult to obtain at all can sometimes be available at this stage. For en primeur purchases, you should contact the vineyard directly. At a somewhat higher price, vintage cases can be purchased either from dealers or from the vineyard itself. This has the advantage that you have expert advice on what vintage or type of wine to choose. Many dealers will move the wine directly to their bonded warehouses after purchase for completely secure storage. A wine has to be held 10 years at least to bring the best value. Some wines will last much longer than that so it is possible to choose a great vintage year, to hold it for only a few years and then to resell it. But the best value comes from buying en primeur and then hoping that you’ve picked a good year that matures with the full qualities of a great wine. When you are ready to sell, approach an auctioneer or a dealer and see what price you can expect to get. You may treat wine as an asset like any other that you earn a profit on. But many will get caught up in the poetry and expression that wine brings. Even without drinking it, you might find the beauty of the vineyards and the skill a winemaker brings to the art of creating fine wines is something to admire. That is when ownership becomes a true privilege.
Smart cities Emma Woollacott examines the increasingly influential role technology is playing in how our cities are run
ou leave your apartment building to travel to the airport. It’s dark but as you step onto the pavement, nearby street lights come on. Your driverless car arrives, greets you by name and speeds you through the city. Although it’s rush hour, the traffic moves smoothly and all the traffic lights seem to change in your favour. At the airport, you find a parking space immediately, despite the fact the car park appears at first glance to be completely full. You leave without paying, knowing it’s all been taken care of automatically. This sort of convenience and efficiency is just a dream for the inhabitants of most of the world’s cities today, which are facing more pressures on their resources than ever before. According to the World Health Organisation, 54 per cent of the world’s population lived in a city in 2014 and that number is growing by two per cent a year. For this level of growth to remain sustainable, things have to change. Enter the smart city. For the past few years, technologists and city planners have been looking at the possibilities of the Internet of Things (IoT) – an emerging trend for everything from washing machines to heart monitors to be given connectivity features. This
allows them to communicate their current status for monitoring and management, improving efficiency and ease of use. And when the same principle is applied to vehicles, traffic lights, rubbish bins and environmental sensors, the smart city is born. So far, most smart city applications are limited in scope – although residents are still seeing major benefits. In Glasgow in Scotland, for example, waste bins have been installed that automatically alert the council when they are nearly full. “This package of measures will ensure resources are focused where they are needed most and reduce wasted journeys to quieter areas to check if bins need to be emptied,” says council leader Frank McAveety. “This will make the service more efficient, meaning staff can spend time in busier areas where bins need to be emptied most frequently.” In mainland Europe, Spain is at the forefront of smart city innovation. In Barcelona, for example, smart street lights sense passers-by and brighten when they are near. When the streets are empty, they automatically dim to conserve energy. Meanwhile, in Santander in northern Spain, traffic sensors and GPS-equipped emergency vehicles can communicate with traffic lights to avoid traffic jams at busy times
MAY / TECHNOLOGY
Dubai is leading the way in the region when it comes to the usage of smart technology
and give response vehicles a clear path in the case of an emergency. Blazing the trail for smart cities in the Middle East is Dubai, where the movement of pedestrians is detected by sensors and traffic lights are controlled accordingly, so that drivers don’t get held up unless somebody needs to cross. And, with the aim of improving traffic flow, the city is aiming to have a quarter of all journeys made by autonomous vehicles by 2020.
In Dubai, pedestrians are detected by sensors that turn the traffic lights on and off “One of the major pillars of any smart city is transportation – being able to move from one point to another in the city in a smooth and safe way,” says Abdulla Al Madani, chief executive of the corporate technical support services division of Dubai’s Roads and Transport Authority. It’s in the Far East though that smart cities are really taking off, with Singapore generally seen as the poster child. Thousands of sensors have been deployed across the city-state, allowing the government to monitor and manage everything from the density of crowds to the cleanliness of public spaces – and even individual health. “With applications in place to begin building their smart nation, the country has taken a lead
on connected medical care,” says Collette Johnson, head of medical at electronics design house Plextek. “With the ageing population increasing, along with the cost of care, Singapore is trailing a noninvasive elderly monitoring system that picks up a lack of activity from an elderly person’s home using sensors and trackers.” The government is also using the Smart Nation system to predict how infectious diseases might spread through the city or how people might react in the case of an explosion. Sensors in bus passengers’ smartphones have even been accessed to measure the bumpiness of rides, indicating when road maintenance might be required. The system monitors pollution levels and manages traffic accordingly and can even detect when people are smoking in prohibited places or throwing rubbish from high-rise buildings. In China, too, some truly astonishing applications are starting to emerge. “With Transport for London, you have an Oyster card but when you go to China now they’re using facial recognition,” says Bill McGloin, chief technologist at Computacenter. “They can accept that over there.” Travellers at the main railway station in Beijing now have their image captured to verify their identity and have their tickets checked. In the leading smart city of Yinchuan, this system is taken one step further. A customer’s face is linked to their bank account, allowing bus passengers to pay automatically simply by having their faces scanned. In many cases, though, the loss of privacy in China’s smart cities has a positively Orwellian feel. Following recent terrorist attacks in Xinjiang Province, for example, drivers in some cities have been ordered to install satellite navigation
“There is an inherent risk of mission creep from smart cities’ surveillance programmes. Traffic cameras could be used to track individuals” equipment in their vehicles to “ensure social security”. Less sinister – but rather infantilising – is the introduction of facial recognition in the lavatories of one park in Beijing. Frustrated that customers were using too much loo roll, the Temple of Heaven park has installed new dispensing machines. Machines
now scan visitors’ faces before dispensing a 60 to 70cm strip of paper – and won’t give any more until nine minutes have passed. Many human rights organisations are concerned about the implications of such invasive technology. Tracking individuals to this degree entails an enormous loss of personal privacy
MAY / TECHNOLOGY
Above: Visitors to Smart Cities India, one of an increasing number of events relating to the advent of smart cities worldwide Left: A tourist uses a mobile phone to find information about Santander, one of the smart cities in Europe Opposite: Crowds walk below neon signs on Nanjing Road in Shanghai
for citizens – and can ultimately become a tool of oppression. “There is an inherent risk of mission creep from smart cities’ surveillance programmes,” says Adam Schwartz, a senior staff attorney with the Electronic Frontier Foundation. “For example, cameras installed for the benevolent purpose of traffic management might later be used to track individuals as they attend a protest, visit a doctor or go to church.” Indeed, China is open about its plans to introduce, by 2020, a fully smart infrastructure, which will
monitor a citizen’s every action, from running a red light or turning up late to work to failing to care for elderly relatives. Under this social credit framework, people will be graded on a points system that rewards ‘good’ behaviour, making it easier to borrow money, for example, or get their children into a top school. The system has been in place for businesses since 2013 – and in that time, according to China’s National Development and Reform Commission, 6.15 million executives have been prevented from buying air
tickets and 2.2 million from buying high-speed rail tickets as a result of becoming “discredited”. Most nations, however, would shy away from this level of surveillance and control and are taking measures to try and minimise the intrusiveness of smart city technology. That means limiting how data is shared and, where possible, anonymising it so that individuals can’t be identified. There is general agreement that in general smart cities are a great thing – just as long as they don’t become too smart.
MAY / PROPERTY
Dutch delight A rare opportunity to buy a restored canal house in the leafiest district of Amsterdam
msterdam is renowned for its beautiful canal houses and none is more beautiful than this 495-square-metre property in the leafy Plantage neighbourhood. Built in 1892, the house has been completely renovated and includes six bedrooms, two bathrooms, a basement and a huge garden. Right from the entrance and the beautiful marble staircase, it becomes clear that this house is something special. Observe the restored painted ceilings, the herringbone parquet floors and the huge conservatory offering
views of the stunning back garden. The first floor offers views of the zoo, one of the oldest in Europe, as well as a huge study with floorto-ceiling bookcases. A large master bedroom also offers views of the Japanese-style back garden. The second floor is home to four large bedrooms and the attached bathrooms. The huge basement is the perfect location for an openplan kitchen and also connects directly to the south-facing garden. The Plantage neighbourhood is one of Amsterdamâ€™s nicest, home to the zoo, the Botanical Gardens and the Wertheimpark.
Demolishing legacies Jennifer Johnson investigates Japan’s destructive inheritance tax laws
omes are disposable in Japan. Just 15 years after being built, the average house is worth little and by the age of 30 there is a fair chance it will have been demolished. In western cities such as London, where homes built in the 19th century still command the highest prices, this situation would be mind-boggling. But to the Japanese, a home isn’t seen as an asset or an investment. Frequent earthquakes, ever-changing building codes and poorly built post-war homes have combined to create a culture in which houses are considered temporary. And there is one further factor, a government policy that drives children to bulldoze their parents’ homes: inheritance tax. Japan’s inheritance tax rates are among the highest in the world. Heirs to a property valued at more than 10 million yen, or about $90,000, are taxed at a minimum of 10 per cent. The rate climbs along a sliding scale, with estates valued at 600 million yen ($5.4 million) or more attracting the maximum
rate of 55 per cent. Compare this with the United States, where the government doesn’t require an estate tax return unless a deceased person’s assets are worth more than $5.49 million. While the Japanese numbers sound punitive, until recently families there found relief through inheritance tax deductions. However, in January 2015, the government reduced the sum exempt from inheritance tax from 50 million yen ($459,000) to 30 million yen (just over $275,000). It also cut the additional exemption for each heir from $91,800 to $55,000. Suddenly, the ultra-wealthy weren’t the only ones concerned about the burden of inheritance tax. The Japan Times estimates 12.7 per cent of estates in Tokyo were taxed in 2015, up from 7.5 per cent the year before. Sky-high land prices can mean it’s more cost-effective for heirs to bulldoze an inherited home and sell off the associated land than simply to pay the tax. “Unless the parents have left the children enough cash to pay the
MAY / TAX LAWS
To avoid paying inheritance tax, some of Japan’s wealthy older citizens have bought apartments in luxury apartment buildings
tax bill, their only choice is to sell the family house,” says Zoe Ward, chief executive at Japan Property Central, a real estate brokerage in Tokyo. “Often they might sell off three-quarters of the land and build on the proportion left. Proceeds from the sale will go toward the tax and to build a new house.” Land is a scarce resource in Japan, where just 18 per cent of
Osaka are still among the world’s 10 most expensive cities to live. In recent years, Japan’s wealthy elite have figured out a way to invest in high-value property without having to pay tax on high-value land: buying a home in a luxury apartment building to pass on to their heirs. This works in property owners’ favour because Japan’s National Tax Agency appraises
“During the bubble in the 1980s people would tear down buildings as the value of the land was so high. The buildings were superficial” territory is suitable for settlement. The country’s mountain peaks might look sublime on postcards but they don’t make property development easy. In 1986 an asset-value bubble hit Japan, driving the price of land to record highs, especially in the major cities. At the market’s peak in 1991, the total value of Japanese land was about $18 trillion – four times the value of all property in the United States at the time. “During the bubble people would happily tear down buildings that were only a few years old,” says Alastair Townsend, founder of Bakoko Design Development architects in Tokyo. “The value of the land had [grown] so much in proportion to the value of the building that the buildings were just superficial.” Although prices fell after the bubble burst, Tokyo and
buildings as a whole and divides tax responsibility based on floor space. “If someone has $1 million sitting in a bank account, its tax value is going to be face value,” says Ward. “If they instead bought a $1 million apartment, it might have a tax value of $200,000, which would keep them below the taxable threshold.” Unsurprisingly, this inheritancetax loophole has driven older Japanese to seek out high-rise properties. For instance, when apartments went on sale last year at Proud Tower Tachikawa, a 32-storey building in west Tokyo, the average age among buyers was reported to be 53. But their advantage is unlikely to last long. Last year chief cabinet secretary Yoshihide Suga told a press conference that the government is looking into ways to divide tax responsibility according to the
MAY ISSUE 137
UPFRONT / TAX LAWS
“A lot of people have moved to Singapore or Hong Kong. If you die in Japan, your whole net worth is subject to Japanese inheritance tax”
market value of apartments rather than their floor space. At the heart of Japan’s inheritance tax situation is its national debt. The country has the world’s highest level of government debt as a percentage of GDP. Naturally officials are keen to reduce the deficit, especially as the population is in decline. But while taxation is a straightforward way to drum up revenue, it could also damage the country’s economy by driving high-earning workers out of the country and preventing skilled expats from relocating to Japan on a long-term basis. “A lot of people have moved to Singapore or Hong Kong,” says Trevor Reynolds, director
of Banner Japan, an arm of international asset management firm Banner Group. “Singapore was the port of choice because there is no inheritance tax and corporation tax is only 18 per cent. I think people will think twice about coming to Japan because if you actually die here, your whole net worth is subject to Japanese inheritance tax.” Foreigners who have maintained a jusho, or ‘principal place of living’, in Japan for more than 10 of the last 15 years will, under the latest tax reforms, also be subject to inheritance tax. And even if they leave the country, foreigners’ worldwide assets could still be liable to Japanese gift and
The percentage of homes that will be vacant in Japan by the year 2023
inheritance taxes for up to five more years (that is, until they have no longer had a jusho in Japan for 10 of the previous 15 years). For wealthy individuals who choose not to move abroad to escape inheritance penalties, there is another option for reducing tax: building to rent. “If a person inherits undeveloped land and borrows money from the bank to build a rental property, then his or her net inheritance amount is going to be reduced,” says Dr Jiro Yoshida, an associate professor of business at Penn State University specialising in real estate economics. “This is because of the debt and also because renters have some legal property rights on the real estate.” Building a new property in a country where a falling population means that about one in five homes will be vacant by 2023 seems counter-intuitive but as long as inheritance tax is high, the wealthy (and their financial advisors) will work hard to avoid it. They work so hard at it, in fact, that the time, energy and ingenuity they expend risks becoming a loss to the Japanese economy. In a white paper published last year, Richard Koo, chief economist at Tokyo’s Nomura Research Institute, wrote that investing time and money in avoiding inheritance tax is a “waste of human and physical resources”. The time that heirs spend managing real estate to avoid inheritance tax is time taken away from economically productive work. So what is Japan to do? If inheritance tax were dramatically reduced or even eliminated, newly wealthy heirs would have less incentive to contribute productively to the economy. But if inheritance tax is increased or maintained at present levels, heirs will remain preoccupied with loopholes and avoidance schemes. As its population ages and shrinks, Japan would do well to find a middle way.
BANG & OLUFSEN SPEAKERS This wireless speaker system is a series of wall-mounted hexagonal tiles â€“ each tile hiding an amp, a speaker or an acoustic camper. They can clip together in a series of patterns, colours and fabrics. Bang & Olufsen, from $4,250, bang-olufsen.com
MAY / SPEND
TROPHY TABLE LAMP
UTOPIA AND UTILITY STACKING VESSEL
This beautiful lamp was designed by Nika Zupanc, a Slovenian designer. Finished in a glossy ceramic glaze, the lamp evokes memories of the Golden Age of Hollywood and is as simple as it is beautiful.
This stunning limited edition stacking vessel is made by the German craft company Utopia and Utility. Made from brass, wood and glass, this will enhance any interior.
Sé, from $1,203, chiaracolombini.com
Utopia & Utility, from $1,800, williamandson.com
BETHAN GRAY CABINET This incredible piece of furniture is part of Welsh designer Bethan Gray’s Shamsian Niswa collection. Handmade from maple wood and stain-shaded with a solid brass overlay, this is a magnificent piece. Bethan Gray, from $8,700, bethangray.com
BELLERBY & CO GLOBE
This striking red edition not only looks great but is for a good cause too. Every purchase contributes to the Global Fund to support Aids programmes around the world.
Hand-made in a North London studio, Bellerby & Co’s globes are painted and placed on to moulds designed by Formula One engineers.
FERDINAND BERTHOUD WATCH The Chronomètre FB 1 watch combines modern technology with classic maritime styling.
Apple, from $749, apple.com
Bellerby, from $1,686, bellerbyandco.com
Ferdinand Berthoud, from $200,808,
MAY / THE BUSINESS
Treasure trove Kate Silver explores Chicago’s Architectural Artifacts, where cast-offs have cache
trolling around the lofty, brick-lined showrooms of Architectural Artifacts in Chicago is like walking through a museum. There’s a thick marble bathtub from 12th century Italy, a 600lbs terracotta eagle from a bank in Kansas City, a merry pair of French carousel lions, intricate fretwork designed by Frank Lloyd Wright, relics from the Chicago Board of Trade designed by Louis Sullivan, a leather pommel horse bench. But unlike a museum, everything at this antique shop is for sale, with price tags up into the five figures. It doesn’t look like an antique shop - not in the stereotypical dark, dusty, cluttered, hoarder sense. It is clean, organised and filled with natural light. With distressed hard wood floors and high ceilings, it is the kind of place that would be fun for a wedding or party – and it is, hosting four to five events a week in three event spaces (all of which can be decorated with gargoyles or, say, a chair made from moose antlers). The treasure hunter behind it all is Stuart Grannen, a 60-year-old professorial type with fluffy grey hair, wearing a smart blue sweater and natty red pants as he gives me a tour of the 7,430-square-metre site, which turns 30 this year. As we walk, Grannen reveals he had always wanted to climb around old buildings, study archaeology, travel the world, breathe new life into abandoned relics – and avoid
interacting with the public. Four out of five can’t be bad. Grannen just returned home from a whirlwind trip, visiting markets and old buildings in Italy, France, Poland, Ireland, St Barts, Anguilla and Cuba. Tomorrow he will work with a team to dismantle a porch in Chicago that, in the 1800s, belonged to an asylum. “It’s a beautiful two-storey cast-iron porch, incredible thing,” he says, his eyes lighting up. “One of the best things I’ve ever had,” he adds in a way that makes you wonder how many times he has said that. Grannen comes from a family of collectors. He grew up in New Jersey, where his parents had a penchant for amassing traditional American furniture from the 18th century. “I appreciated it but it wasn’t for me,” says Grannen. Even as a child, he was drawn to bold, colourful conversation pieces. At the age of seven, he made his first antiques purchase from a nearby Baptist church. He had saved up $100 from mowing the lawn and shovelling snow to buy an enormous stained glass window, decorated with black angels. “It got me thinking: ‘If you see something you want, go out and get it somehow,’” he says. The lesson stuck and he continued making purchases throughout his early years – giant terracotta heads, more stained glass, antique doors –“strange things”, he says. He got to
know the men working at wrecking companies who updated him about their demolition schedule. Then he would make his move and salvage items that caught his eye. “It was going to be destroyed if you didn’t save it,” he says. The collecting habit grew when he went to study at the University of Tennessee, Knoxville, where he took archaeology and AfricanAmerican studies. Knoxville was preparing for the World’s Fair of 1982 and houses were being razed. Grannen bought the rights to some of the buildings and collected fireplace surrounds, art and other objects, which he would sell and use the money to fund travel and continue collecting. “I was always pretty entrepreneurial,” he says. In time, his wheeling and dealing took him to New Orleans – a
hotspot for antiques and vices – and he got caught up in both, so much so that he ended up in a rehabilitation centre in Minnesota, trying to get his health back in order. While there he began doing for himself what he had so long done for buildings: salvaging the important parts before they were lost to the world. That’s where he was when he got word of a deal in Chicago. A wrecking company was about to tear down a building loaded with terracotta. He felt compelled to save it and climbed out the window of the treatment centre, hitchhiked to Chicago in the middle of winter, went straight to the wrecking company and offered to buy the building. They struck an agreement and he hitchhiked back to Minnesota to finish his treatment.
MAY / THE BUSINESS
Grannen has been successful for 30 years because of a simple business model: he acquires rare items and puts a fair price on them When Grannen got back on his feet, Chicago kept calling. “It was always the queen city of American architecture,” he says. “By the turn of the century, much of New York had been built. Chicago was just sort of coming into its own.” The Windy City is the birthplace of the skyscraper after all and that development and technology angle appealed to him. Plus, two of his favourite architects, Louis Sullivan and Frank Lloyd Wright – “the two greatest American architects ever,” he says – had lived in the Windy City and their marks remained on buildings around town. Grannen wanted a piece of it all. In 1987, he found a small warehouse space in the Ravenswood neighbourhood and started filling it with the thought of opening shop up on weekends. Across town, old buildings were constantly being torn down and at the same time, scores of residents were interested in gathering antiques as well as selling parts of their collections. Responding to consumer demand, he ended up opening to the public seven days a week. When his collection outgrew the space, he moved to the enormous loft he is in today. In the years that followed, he would throw parties at Architectural Artifacts for friends themed around garden antiques, stained glass and folk art. Word spread and strangers started approaching him about hosting private events and weddings. Before he knew it, there was a party scheduled for almost every night. He had stumbled into the event business out of demand but as
someone who prefers to remain behind the scenes, it was not his scene. Last year he sold that arm of the business. “Somebody made me an offer I couldn’t refuse,” he says. Today he prefers to spend his time doing what he does best – hunting for treasure. One day he might be dismantling cast iron grapes from that wraparound porch; another day, a friend in Germany might call and say there is a butcher’s store up for sale for $20,000 and sight unseen, Grannen will buy it. He spends about one-third of the year on the road, always in search of the next best thing while back home in Chicago, eight employees help run the store, which is still open to the public seven days a week. Customers come and go, but the bulk of his sales are to private collectors and businesses – especially restaurants, bars, brewing companies and hotels. Over the course of three decades, Grannen says he has been successful because he follows a pretty simple business model: he acquires rare items and puts a fair price on them. Along the way, he admits he has made mistakes, often buying items no one is interested in. But that comes with the territory. “One of the secrets is when it doesn’t work out, just get rid of it.” After all, that was where it was headed in the first place. If one man’s trash is another man’s treasure, then the reverse can also true. Architectural Artifacts, 4325 N Ravenswood Avenue, Chicago, Illinois. Tel: +001 773 348 0622. architecturalartifacts.com
MAY ISSUE 137
UPFRONT / CLASSIC READ
Trust Me, I’m Lying By Ryan Holiday
ads are bought based on impressions so owners are only concerned by page views. As Holiday points out: “Blogs do everything they can to increase traffic. Every decision a publisher makes is ruled by one dictum: traffic by any means.” Writers working for the likes of Business Insider know the only chance they have of moving up the ladder (or getting a better paid job in the traditional media) is by getting scoops and controversial stories. Holiday advises getting these writers onside by feeding them stories and when they move to the likes of Time or MSNBC,
Holiday traces the journey of ‘fake news’ from the yellow press of the 1800s to the bloggers of today
ever more relevant than now, Ryan Holiday’s 2012 book Trust Me, I’m Lying lifted the lid on some of the self-confessed media manipulator’s secrets. A former PR director for controversial clothes brand American Apparel, Holiday knows a thing or two about gaining media coverage – by fair means or foul. In this era of ‘fake news’, it’s instructive to look at the tactics that Holiday exposes. He shows how it is easy to manipulate the media to report what you want by creating fake personas, sending fake scoops to blogs and watching the story move up from blogs to online news sites and then to national newspapers. He even shows how easy it is to game Wikipedia, a site that (too) many journalists use to verify sources. The tactic is simple: start at
the bottom with blogs (who do little or no fact checking), then move up the chain – each contact assumes that since it’s run on the other sites it must be verified so they run the story without fact-checking. When this works, his stories end up in the national press. For one client, a controversial author named Tucker Max who had a film out, he paid for a billboard promoting the film to be vandalised. Holiday took pictures of the vandalised billboard, claimed it was proof people were angry about the release and sent them to a local blogger. That story went up the chain until it reached the national media – giving the film free publicity. Part of the issue lies with the business model of news websites and blogs. Blogs make their money from ads and
you have a grateful contact to bring stories to. Another tactic is orchestrating ‘leaks’, whereby Holiday would pretend to be a disgruntled employee and send whatever story he wanted covered to bloggers disguised as a leaked memo. Writers who ignored his official statements would lap up these ‘exclusive leaks’ and Holiday would get his side of the story into the media. The second half of the book focuses on why this type of media manipulation is wrong – and why the PR industry has to take much of the blame. In this era of fake news, it is worthwhile examining how we got to this point and Holiday’s book traces these tactics all the way back to the 1800s. Cynics will point out that it is in Holiday’s interests to come clean. He has a book to sell and no longer works in marketing. Yet the motives are less important than the result: a clear-eyed treatise on how the media works in the era of clickbait and fake controversies. Sobering for some, inspirational for others, Trust Me I’m Lying is a necessary look at the seamier side of the media industry and one that, whether unwittingly or not, many people are contributing to in some way.
THE ART OF COLLECTING
THE ART OF COLLECTING David G Taylor examines the opportunities and pitfalls of investing in art 34
THE ART OF COLLECTING
THE ART OF COLLECTING
Our mother never did anything in small measures,” said Jackie Collins’ daughters as they unveiled a treasure trove of paintings, sculptures, jewellery, memorabilia and personal items from the late author’s estate, estimated at around $3 million, ahead of their sale at Bonhams in Los Angeles this month. The younger sister of British actor Dame Joan Collins, the author blazed her own trail with a succession of steamy bestselling novels that included Hollywood Wives, The World Is Full Of Married Men and The Stud. In her career, the Lady Boss writer sold more than 500 million books in 40 countries and used a substantial chunk of the proceeds to fund her passion for collecting, particularly art deco sculpture and 20th century American and British art. It’s an aesthetic that her three daughters, Tracy, Tiffany and Rory, describe as “combining elegance and glamour with humour and warmth”. Taking place on May 16 and 17, Jackie Collins: A Life In Chapters boasts 1,000 lots from the author’s lavish Beverly Hills home. Among the auction’s highlights, you might want to bid for Josef Lorenzli’s silvered-bronze statuette Nude With Shawl (estimated at $18,000 to $25,000), Beryl Cook’s whimsical oil painting Tango In Bar Sur ($20,000 to $30,000), a jaw-dropping geometric art deco necklace made from 44-carat diamonds, emeralds and platinum ($40,000 to $50,000) and Jackie’s special edition
Above: Two gallery assistants pose with Air Power by Jean-Michel Basquiat during the press preview of the Bowie/ Collector auction at Sotheby’s last November in London Above left: An employee at Bonhams in London in 2013 holds an appearance contract for David Bowie to perform at Ealing College on April 29, 1969 in London
2002 Jaguar XKR bespoke sports car – finished in an eye-catching metallic gold, obviously. “Jackie Collins lived the lifestyle about which she wrote,” says Leslie Wright, Bonhams’ vicepresident, “and the sale will provide an exclusive insight into the real woman behind her unforgettable characters. Her books were loved by millions of readers worldwide. This is their chance to own a piece of the magic.” Bonhams must be hoping for a glimpse of the auction wizardry seen when both art collectors and David Bowie fans vied for pieces of the rock star’s collection at Sotheby’s London last winter. An astounding 59 items set new record prices for their creators, including Frank Auerbach, Peter
THE ART OF COLLECTING
Alberto Giacometti’s Buste de Diego goes on view in London at Sotheby’s last month
Lanyon and Patrick Caulfield. Many more pieces far exceeded their pre-sale estimates with the collection’s top seller proving to be Air Power by graffiti artist Jean-Michel Basquiat, sold for $8.8 million. The auction bagged an impressive $41.1 million, attracted 56,000 people to its pre-sale exhibitions and pitted 1,750 bidders in a frenzy against one another, many taking part online. Arguably, it has also awoken a broader demographic of art lovers to the lucrative potential of collecting as an investment. The full impact of the Bowie effect has yet to be measured. However, as well as attracting premium prices at the sale, the vast publicity generated has undoubtedly enhanced the marketability of Bowie’s handpicked selection of artists and art movements.
The auction of David Bowie’s art collection saw an astounding 59 items set record prices
surrealism, German expressionism, contemporary African art and even the colourful 1980s furniture designs of Italy’s Memphis Group all featured in the sale but experts think the biggest winner was 20th century British art, which Bowie nudged centre stage from the fringes of the art world. “Bowie’s passion for the artists in his collection has introduced a worldwide audience – and a whole new generation of collectors – to modern British art,” said Frances Christie, head of Sotheby’s modern and post-war British art department at the time. “From Lanyon to Gilman, Barns-Graham to Tillyer, we’ve seen a truly remarkable succession of records as collectors from every corner of the globe responded to the vision and intellect of Bowie as a collector.” The Bowie effect is not the only reason expectations about the investment potential of art is heightened right now. The global market has proven temptingly strong this year. Just this spring, five artist records were broken in Sotheby’s London’s contemporary sale. Notably, German Wolfgang Tillmans’s 2005 piece Freischwimmer 119 set a new record for his photographs at an estimate-tripling $565,345
THE ART OF COLLECTING
and Gustav Klimt’s 1907 oil painting Bauerngarten (Blumengarten) became the Austrian artist’s second most expensive work ever to be sold at auction, scooping a breathtaking $59 million. Over in New York, Christie’s annual Asian Art week brought in a record $200 million, helped by lots such as Six Dragons – a gorgeous 13th-century scroll by Chinese painter Chen Rong that made almost $49 million. Even work by relative newcomers has been selling well. Henry Taylor’s 2007 acrylic The Young, the Brave, Bobby Hutton, R.I.P. Oakland, California – estimated at $35,000 to $45,000, went for an astonishing $235,000 at Christie’s New York while Rabia, 2016 – an elaborately decorated oil and Swarovski crystal portrait by Turkish artist Asli Özok – was sold by Christie’s Dubai for $32,500, despite it being the artist’s auction debut. Inspired by 2017’s booming market conditions? The biggest dilemma for new collectors is how to begin. “Thinking about art as investment is not the way to go,” says Alan Bamberger, a San Francisco-based author, art consultant, advisor and appraiser. “Can you imagine hanging stock certificates on your wall and wondering every day whether they’re headed up or down or sideways or whether to buy or sell?” Bamberger should know. He’s the author of the classic collectors’ guide The Art of Buying Art, which was republished in a revised second edition in January. “Buying what you like,” he says, “is really at the core of great collections.” It’s an approach that Bowie himself took, according to Sotheby’s. “Bowie was drawn to the art for which he felt a profound personal connection, collecting with great intellect and passion,” says Sotheby’s Simon Hucker, a senior specialist in modern and post-war British art. Passion is what shines through in the case of a humble New York postal clerk and his librarian wife who built one of the most important contemporary art collections in history. Despite their modest means, amateur collectors Herb and Dorothy Vogel amassed nearly 5,000 post-1960s works, many stored under the bed of their tiny rented Manhattan apartment. Often buying direct from the artist and paying for pieces in instalments, the Vogels’ collection of minimalist and contemporary art came to include works by Roy Lichtenstein, photographer Cindy Sherman, minimalist Robert Mangold and postminimalist Richard Tuttle. The greater public were introduced to the endearingly enthusiastic and
Top: Visitors view exhibits at the British Art Show 8 in Inverleith House in February in Edinburgh Above: Pablo Picasso’s Mousquetaire a l’Epee Assis (right), next to Edouard Manet’s Le Matador Saluant in Paris
already elderly Vogels in Megumi Sasaki’s 2008 documentary Herb and Dorothy; followed up with 2013’s Herb and Dorothy 50x50, as the couple followed through a promise to donate one artwork to a museum in each US state. Herb has since died but the Vogels’ achievement has forever redefined what it means to be an art collector and, however slim the odds, doesn’t everyone dream of building a collection of equal acclaim? The success of a collection should not be based solely on the profits and recognition it might achieve, says Bamberger – it’s about enjoying the process. “You have to be motivated to want to learn, immerse yourself in the work and surround yourself with things that make you feel good and add value to your life. Those are the kinds of intangible investment dividends that art pays.”
THE ART OF COLLECTING
Anyone wanting to follow the Vogels’ lead would be wise to take an interest in artists already garnering acclaim, such as those heralded by Artsy.net in its article 17 emerging artists to watch. This year’s list – compiled using a number of sources ranging from curators to art news sources like Planet app – heralds promising new talents such as Max Hooper Schneider from Los Angeles, who crafts otherworldly, conceptual sculptures inside scavenged objects like a
Top: A guest attends the press preview for the Henri Matisse exhibition Above: Young Woman Bathing Her Feet in a Brook by Camille Pissarro
1950s dishwasher, a discarded plasma lamp and even an old morgue sink. Then there’s Claire Tabouret, a Parisian figurative artist who paints images of girls that are edgy with foreboding and Glasgow-based Rachel Maclean, who this month represents Scotland in the Venice Biennale. Her dreamlike photos and videos depict dystopian fantasy worlds in which the artist herself is seen transformed into an array of unsettling characters, from sinister cyborgs to freakish trolls. Several similarly authoritative lists are produced each year by the arts media, offering valuable tips for free while collectors can keep an eye on market potential with the minimum of effort, thanks to websites such as Artprice.com. “As far as money considerations go,” says Bamberger, “making sure you’re paying a reasonable price now is a sensible way to proceed. No one can predict what the market will do, especially if you’re buying younger unproven artists. But the more established an artist is in his or her career, the more market and price information tends to be available for research or comparison purposes – and the clearer the artist’s trajectory tends to be.” Wassily Kandinsky, Camille Pissarro and Henri Matisse are among a wealth of well-proven artists you might consider bidding for when they go on sale at Bonhams’ Impressionist and modern art sale on May 17 in New York. Particular interest surrounds Matisse’s 1947 vibrant cut-
THE ART OF COLLECTING
out, Arbre de Neige, estimated to fetch between $800,000 and $1.2 million. William O’Reilly, Bonhams’ vice president and director of Impressionist and modern art in New York, says: “It’s not often that Matisse’s cut-outs come up at auction. There aren’t many of them and those that do exist are treasured by their owners or are in museums. They are, however, very sought after – particularly after Tate Modern’s blockbuster show that focused on the cut-outs.” He is talking about the 2014 sell-out exhibition Henri Matisse:The Cut-Outs, which drew huge crowds to the London gallery. “The reappearance of such a characteristic work from the group after almost 50 years is an exciting event,” says O’Reilly. The excitement generated by an exhibition has long been proved to enhance the collectability of an artist but how much importance should new collectors put on the provenance of an artwork? “It is absolutely vital that the provenance is clear,” says O’Reilly. “In the case of the Arbre de Neige by Matisse, the work had been in a private Canadian collection for almost 50 years and before that it belonged to a notable collector of Matisse – someone who knew the artist personally.”
Spanish artist Pablo Picasso at his home in Cannes, circa 1960
“When it comes to building a quality art collection, knowledge really is power”
Think that movements as popular as the Impressionists are over-fished? Think again, says O’Reilly. “There are still good areas for collectors within the realm of Impressionist and modern art. For instance, I am always amazed that Latin American modernism is still such great value. In our sale we have a beautiful work by the Colombian modernist, Alipio Jaramillo [1913-1999], estimated at $20,000 to $30,000. There are even periods of Picasso’s career that are overlooked. We have a drawing of a Cubist abstraction of a mandolin from 1925, which is a characteristic example of his work, estimated at $40,000 to $60,000.” Don’t be afraid to seek guidance, says O’Reilly. “Even seasoned collectors in the field require advice from auction houses and art advisors.” So can he offer any other pointers for collectors intending to bid at their first auction? “Do your research,” he says. “Discuss it with the specialist in charge of the sale. See the work in the flesh – it’s difficult to gauge its size and condition otherwise. And bid in the room so you judge the excitement of the market.” Bamberger thinks auction newcomers should be cautious – unless they are absolutely confident they have done their homework. “People who buy at auction tend to be knowledgeable about what they’re looking at and you should be too,” he says. “If you’re unsure of yourself, galleries that specialise in the art you like the most are usually good places to start. Not only do they tend to have good selections of work for sale but they often offer opportunities to meet the artists, sit down with informed individuals, learn about the art and basically to educate yourself.” In a gallery setting, the price of art is influenced by a number of considerations, says Bamberger. “A gallery typically takes a 40 to 60 per cent commission. Most commonly, they split the selling price evenly with the artists,” he says. “Gallery prices are generally set according to a number of factors including past sales history, the artist’s preferences, current market conditions, what comparable artists’ work is selling for (when the artist has little or no sales history), what similar work tends to sell for in that geographical area, time, labour and cost of materials.” You do not want to end up with a collection of art that other people told you to buy and that you do not feel some sort of attachment to, says Bamberger. “Liking it is important but it is only the beginning – and that’s where research comes in. You want to inform yourself about what you’re buying before you buy it and you also want to make sure you’re paying a reasonable price for whatever art you’re thinking about buying. When it comes to building a quality art collection, knowledge really is power.”
HITTING THE HIGH NOTES
When Jasper Hope left the Royal Albert Hall in London to head Dubai Opera, he realised it was a once-in-a-lifetime opportunity. He tells Iain Akerman about the successes Dubai Opera has had so far and why the future looks even better
HITTING THE HIGH NOTES
HITTING THE HIGH NOTES
asper Hope, the chief executive of Dubai Opera, is sitting in a disconcertingly spartan office in the heart of the city’s new cultural destination. On its walls is a single frame featuring commemorative programmes from the Royal Opera House in Covent Garden. They are dated 1903 and 1905. There is nothing else, just a desk and a few chairs. “All of our offices need brightening up,” he admits. “But these things come. We wanted to just get on with it, to start doing shows. And the colour and the life and the vibrancy of this place is not [apparent] at 10am. Come back at 8pm and see the way this place glows. See the lights, go into the auditorium and watch a show – then you’ll get the buzz. That’s what it’s about.” Hope is no stranger to the thrill and spectacle of the theatre. As the chief operating officer in the Royal Albert Hall in London before his arrival in Dubai, his entire career has been in showbusiness – which is why he was approached by Emaar to become Dubai Opera’s first chief executive, overseeing its launch in August last year and now responsible for its growth and future success. “I had seven unbelievably good years at the Royal Albert Hall and I loved every minute,” says Hope. “I was fortunate with some success there that people recognised but I had been thinking for a while: ‘Will I be at the Royal Albert Hall forever?’ Because it is a very easy place to stay for a very long time and I had not really come to a conclusion. I was not really sure where else I would go. There were other incredible, iconic buildings that I could go and work at, help develop or change but a part of that would just be recreating what I had been doing for the last seven years and I was not sure that was necessarily for me. “Then one day I got a phone call about this idea and I did not take it seriously at the beginning. Like many people, I never thought of Dubai and culture in the same sentence – but I came and I saw and I understood two things. “Firstly, although it was a real estate company [behind it], not an entertainment or cultural company per se, [Emaar] knew exactly what it wanted and was completely serious about it. Secondly, which I had just not appreciated about Dubai at all, there wasn’t already a theatre – a proper professional concert hall, theatre or even
“It might not work out but I just thought, this is what you dream of”
arena – in this amazing city. I had never been here before and it just did not occur to me that somewhere that had the world’s tallest building and all the amazing other attractions that this city and emirate has would not have a professional theatre, concert hall or opera house. “It does not matter what else I do for the rest of my career, I will never get an opportunity like this again – to go into a completely new market. That is what I thought. The challenge of doing that and trying to make a success of it is in many respects about as different from running a 150-year-old iconic concert hall like the Royal Albert Hall as you can possibly imagine.
HITTING THE HIGH NOTES
Left: Jasper Hope Below: Dubai Opera draws sizeable crowds for its shows
“But I had to try. It might not work out, it might not be for me. I did not know the region, I had to move my family – but I just thought professionally, this is what you dream of: for the next potential amazing thing to be this, albeit something that is not for the fainthearted and certainly comes with a great deal of pressure to deliver. I just thought: ‘I have got to go for it.’” And here he is, just over two years later, feeling the pressure, although in a relaxed, semi-contented sort of way. With an average occupancy per performance of 85 per cent, more than 150,000 tickets sold in the first seven months and 110 performances under his belt, things are going extremely well.
HITTING THE HIGH NOTES
Yet Dubai Opera has none of the heritage or prestige of the Royal Albert Hall to build upon nor is there widespread awareness of its existence. How much of the cultural venue’s early success is down to the choice of show? And how much of it is down to the fact that Dubai Opera is brand new? How much of its success is owed to events taking place around the city at the same time? These are questions Hope is constantly asking himself. Then there are the costs involved. The 2,000seat multi-format venue, designed by the British architectural firm Atkins, cost $330 million to complete, employs 105 full-time staff and is faced by the sometimes daunting expenditures involved with bringing world-class productions to Dubai. Disney and Cameron Mackintosh’s multi-awardwinning musical Mary Poppins, which is being staged at the venue throughout May, involves 18 trucks’ worth of production equipment. And although the building itself was a gift from Emaar to Dubai, meaning Hope does not
$330 million Cost of building Dubai Opera
Number of people the opera can accommodate
Number of full-time staff
have to factor the capital cost of its construction in his calculations, the pressure to deliver is nevertheless there. “It is early days,” says Hope. “We have only been open seven months so am I under a huge amount of pressure on every single show? No. We’ve only just begun. There was no data, no theatre, no ticketing system, nothing, so it is very hard to compare against anything, certainly locally, although internationally you can. “The brief was defined at the beginning in terms of bringing in people, bringing in wonderful shows and making it a triumphant success but not at any cost. That was very important. “Emaar is a commercial company. As an operating model, the way the Albert Hall worked is actually very similar to the model for Dubai Opera: not to be funded directly by the state or anybody else but to operate as a private and entirely independent cultural institution and not to have to go cap-in-hand for subsidies from an arts council or equivalent body.
HITTING THE HIGH NOTES
In other words, to drive all of our revenues for the annual operation, including the shows and the people and the maintenance, from the building itself.” This is being done primarily through ticket sales, of which 41,312 were sold for Cameron Mackintosh’s production of Les Misérables at the tail end of last year. Then there is sponsorship and partnerships, food and beverage (which will increase once the rooftop restaurant is opened) and private functions. Hope says there are “clearly there are other objectives to having the very first building of this kind in the country.” He adds: “It is a lot more than just about money and even if it was just about money, you do not build an opera house from a purely financially driven set of criteria. “You do build an opera house if you want to drive, or help drive, tourism. You do if you want to help drive the mechanics or the financial elements that go with that [such as] additional hotel spend, dwelling time in cities, time spent in restaurants.You
Opposite: Mary Poppins Above: Les Misérables
“You don’t build an opera house from a purely financially driven set of criteria”
might [build one] if you were looking at it purely from a real estate point of view or from a quality of life point of view. Does it enhance the quality of life in the city and does that bring revenue?” Emaar, no doubt, will be counting on the opera house to do all of these things in the long term and will be banking on Hope being the man to make it a reality. He certainly arrived with high expectations and a string of successful live events to his name, together with yearon-year growth during his tenure at the Royal Albert Hall, including its best-ever financial performance the year he departed. Importantly, however, he is helped by the venue itself. Visually stunning and with a dhow-shaped design rooted in Emirati heritage, the building’s capabilities are unprecedented for the UAE and rare for the Gulf region, which has few similar venues (there are opera houses in neighbouring Doha and Muscat). The scale of Dubai Opera is audacious and grand. The auditorium’s central chandelier weighs 5,000kg and consists of 2,900 LEDs on 750 strings. The building’s ceiling has a lifting capacity of 191,350kg, which is as heavy as a blue whale or 15 school buses, while the theatrical rigging system has 18km of wire rope. There are 97 speakers in the auditorium and a single one of the venue’s moving lights can provide 1.2 million shades of colour. “I never do anything if I do not believe we have got a chance of getting to 100 per cent occupancy,” says Hope. “You very rarely do so it comes down to some very narrow margins between what is acceptable, where you want to get to and what the difference is. “I would say on average we have not had less than 84 or 85 per cent occupancy across all 110 performances. It’s fantastic and if I can
HITTING THE HIGH NOTES
He says the artist or production is the “start of everything, adding: “The second thing is once you’ve hooked them, they need to want to go to your building so you have to make the experience good enough, special enough, worthy enough to persuade a person to buy a ticket. As a result of
“You have to make the experience good enough, special enough to persuade a person to buy a ticket”
The coming months will see the arrival of The Marriage of Figaro (top) and Jersey Boys (above) to Dubai Opera
maintain that for the next seven months, I will be absolutely delighted.” Of paramount importance, of course, are the shows themselves. The venue launched on August 31 last year with a sold-out performance by Plácido Domingo, one of the world’s most prestigious tenors and continued with productions of Bizet’s The Pearl Fishers and the comic ballet Coppélia. The coming months will see the arrival of Mozart’s The Marriage Of Figaro and the musical Jersey Boys, with opera, ballet and classical music at the core of its offering. “In a building like this you are defined by two things,” he says. “First and most importantly, because it is what sparks everybody’s interest, is what or who is on stage.”
that you have to ideally get them into the mindset that they are prepared to do it more than once because this is a repeat business opportunity if you get it right the first time.” A potential obstacle to repeat business is ticket pricing. The Welsh National Opera’s production of Puccini’s La Bohème set audiences back $190 a head for a decent seat in the main stalls. A premium seat (the best place to sit) for the upcoming production of Mary Poppins costs about $260. “Opera is expensive,” says Hope. “It’s a very expensive art form. That’s not because I am looking to rake in the cash, it is because I need to cover the cost of doing it and we do not have an opera company based in Dubai. We don’t have an orchestra or a professional musical or dance ensemble. I have to fly these people in and they have to get paid. It’s expensive. And that’s not just confined to opera. All artists are expensive. But in terms of value I think for what you would have had, 700 [UAE dirhams] is not an outrageous sum.” Is he happy with how everything has gone so far? “From an experiential point of view I’m very pleased with where we are now,” he says. “It is not 100 per cent there but it is very good and I think in a couple of months when the restaurant is finished that will raise the experience another level from where it already is. For the rest, it is more about refining that programme, making sure that [price-wise] we are right where we need to be and that sales are maintaining that 80 per cent-plus occupancy. “Regionally and internationally there is still a job to do in getting the word out – to make people aware Dubai is now very firmly part of those cities that have a music and entertainment offering that is worth consuming, worth trying. We need to make sure [it is known] that opera and musicals are something to do in Dubai and that is an ongoing priority for us.”
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TICKET TO RIDE
TICKET TO RIDE Lauren Razavi examines whether Uber can survive its current problems or whether its losses and scandals will see the ride-sharing app collapse
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he world’s most valuable private start-up has a money problem. Despite a valuation of more than $69 billion, Uber recorded losses of $1.27 billion during the first half of 2016 and lost a further $800 million in the third quarter. While burning through dollar bills is nothing to be ashamed of in Silicon Valley – nor is it a particularly notable phenomenon – the company has also suffered a series of well-documented scandals over the past year, including the resignation of Uber president Jeff Jones in March, just six months after he joined the company. Instances like this have led many to question what comes next for Uber and whether the company has a viable future at all. The taxi industry has always been a thinmargin business with vehicle upkeep, fuel prices and insurance to factor in. The costs involved with running a fleet of vehicles soon add up – especially when labour is expensive and most drivers spend an average of more than 30 minutes each hour waiting around for their next ride. Using its technology, Uber has been able to almost halve idleness, an efficiency that results in a lower cost per ride and fewer cars on the road. But the company’s model of working with drivers as freelance contractors has come up against minimum wage laws in the UK and Canada, where courts have ruled the drivers should be considered employees and are therefore entitled to traditional pay and benefits in the eyes of the law. In an increasingly competitive marketplace, Uber has not only failed to turn a profit so far but it has also failed to establish a monopoly. This has left the company unable to raise fares from the rock-bottom prices that riders have grown to expect while also racking up spending on projects that divert the company into additional services. Rather than maintaining a razor-sharp focus on moving passengers from A to B, the company’s strategy has been to experiment with wider challenges in logistics such as food delivery, courier services and even flu vaccinations. Although this might be a smart way to capitalise on its technology, a lack of focus on its core mission has led to speculation about the company’s long-term viability and future. Despite its ambitious – and somewhat confusing – efforts, Uber remains predominately known
for two things: disrupting the taxi industry and garnering controversial headlines. Uber chief executive Travis Kalanick has been at the heart of a series of high-profile media scandals since founding the company in 2009. Most recently, Kalanick was caught arguing with a driver about fares in a video that went viral and quickly spurred accusatory public debate about Uber’s treatment of its employees and contractors. Thanks to the company’s structure as a legal entity, however, the company’s board is unable to remove Kalanick from his position. Martijn Arets is a collaborative economy analyst and co-author of Wavemakers, a book examining the entrepreneurs behind companies that have achieved exponential growth. He believes that outspoken CEOs like Kalanick can provide benefits as well as cause controversy in today’s high-stakes world of tech start-ups. “These CEOs enter a market where consumers feel pain and deliver a solution that is 10 times better than anybody else’s and they do this by focusing on delivering convenience at a competitive price,” says Arets. “The research comes after exponential growth. They only begin talking to regulators when they have gained ambassadors in the form of their users.” But for a disrupter like Uber to establish a loyal fanbase and leverage that foundation to build a successful company, employees and work culture are just as important as innovative technology, if not more so. Start-ups in the digital disruption marketplace must balance creating a great product with attracting the right talent and ensuring their workers feel valued. This becomes especially important for a company like Uber that is subjected to daily scrutiny from blogs and newspapers and relies on venture capital funding to stay afloat. “It’s people, not tech, that ultimately builds a successful company culture and helps it scale,” says Neil Collman, principal experience designer at Nile, a service design and business research firm that works with companies and other large-scale organisations in Europe and the US. “As customers and employees, we like to see a reflection of ourselves and what we value in our environment, the way things work and the people we work with.” Questions about the fairness of Uber’s business model, particularly for drivers, often arise.
“It’s people not tech that ultimately builds a successful company culture and helps it scale over time”
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Uberâ€™s chief executive Travis Kalanick
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Uber controls the pricing of all trips, takes a cut of 20 to 25 per cent for each ride and expects drivers to cover all costs relating to their vehicle. Many drivers talk openly with their passengers about struggling to make ends meet under these conditions and regulators in some locations are intent on making an example of new players that disrupt the long-held status quos of traditional industries. Despite these ethical debates, however, Uber’s trailblazing journey continues.
“Uber’s current strategy is not sustainable – especially for the drivers. People will only adopt a fairer solution when it offers a better service”
“In the short term, convenience will win,” says Arets. “Although anyone can see that Uber’s current strategy is not sustainable – especially for the drivers – people will only adopt a fairer solution when it offers them a better service. But since transactions in the sharing economy are local, I foresee a growth of hyperlocal initiatives in the coming years.” When innovative digital products and disruptive business models prove fruitful, it’s not long before similar start-ups emerge to compete in the space. Apps such as Lyft, Ola and Didi Chixung have all capitalised on Uber’s success, carving up its initial monopoly – and in Didi Chixung’s case, buying out Uber’s Chinese operations altogether. The ride-sharing market becomes more saturated each day and as that happens, it becomes harder for Uber to reverse its mounting losses and continue to strive towards the goal of profitability. “I definitely see a fragmentation of the market with niche entrants taking advantage of blindspots or areas that bigger players cannot colonise easily or do not want to,” says Collman. “In service design, we see a trend toward the rise of niche experiences as markets are monopolised, polarised or saturated. In this case, could there be an ethical transport service that offers the same convenience? Or one that is designed especially for business travellers?” Last year, ride-hailing app Juno launched in New York with a structure allowing drivers to own 50 per cent of the company’s equity by 2026. Presumably taking lessons from Uber’s experience, Juno offers a much more appealing deal for drivers
Apps such as Lyft have all capitalised on Uber’s success, carving up its initial monopoly
– although it’s certain that fewer passengers know about the service. In Denver, 800 taxi drivers have each invested $2,000 to start a cooperative and develop their own app known as Green Taxi, which is a fully self-financed platform and has achieved a regional market share of 37 per cent so far. These examples are part of a wider trend towards what Arets describes as “platform cooperativism” in the US, where workers organise themselves through cooperatives and build their own sharing economy apps. But these business models come with their own set of challenges. In Austin, Uber and Lyft departed the market just over a year ago when regulators introduced requirements for drivers to undergo fingerprintbased criminal background checks before using the apps to find work. During this year’s SXSW film festival, local ride-hailing services Ride Austen, Fasten and Fare became overloaded with demand when a sudden bout of rain hit the Texan city. Drivers circled the streets unable to connect with riders while the apps either displayed a
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UBER PROTESTS Argentina Buenos Aires saw demonstrations against Uber in October 2016. The drivers demanded the service be shut down
Madrid Taxi drivers demonstrate against Uber and other ridesharing apps in March
loading screen or reported that there were no drivers available. Strict regulations might foster more localised services but a lack of consistency and reliability can put users off quickly. As cities across the world attempt to reconcile traditional business models with digital disruption, Uber’s refusal to comply with regulations has opened up market opportunities for its competitors. The introduction of new requirements for sharing economy drivers to hold valid taxi licences in Budapest led Uber to withdraw from the Hungarian capital last year. Ride-hailing app Taxify, an Uber competitor founded in Estonia, moved in to plug the market gap almost immediately and now counts Budapest among its key markets. Uber’s last day of operations in Copenhagen was April 18 and Taxify intends to step in there too. So what does the company do differently to Uber? “We work with both taxi companies and private drivers. In Hungary we entered the market operating solely with [existing] taxi drivers and
Rome Taxi drivers shut down the centre of Rome in February
Delhi Drivers go on strike after the withdrawal of incentives in February
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we plan to do the same in Denmark,” says Markus Villig, Taxify’s founder and chief executive. “Our business model is much more flexible and we adapt our strategy according to each market.” Despite increasing market saturation, Uber’s bold vision for the future has proven enough to keep investors interested and to attract new ones. Kalanick has spoken openly about his desire to transition to a fully self-driving vehicle fleet as soon as possible and the company already has several self-driving pilot projects in US locations such as Pittsburgh and Arizona. It seems that cutting out human labour costs entirely might finally bring the prospect of achieving profitability onto the horizon. “Drivers are a very high cost in the taxi industry so it is logical to assume all taxi operators and even public transport operators are keen on self-driving transport,” says Ananda Groag, founder of the mobility arm of ShareNL, an international financial consultancy based in Amsterdam. “Autonomous vehicles should eventually lead to lower cost mobility for users and a better experience, provided that staff shift focus on service.” But with other heavyweights such as Google and Apple working on autonomous vehicle technology, for Uber it’s a race against both the clock and its Silicon Valley competitors. Waymo, the mobility subsidiary of Google parent company Alphabet, launched a lawsuit against Uber for stealing trade secrets and filed an injunction intended to halt the ride-hailing giant’s work on self-driving cars until the case is over. In response, Uber stated that stopping this research would impede its efforts “to remain a viable business”. Put differently, the company has a lot riding on a future without drivers. “We can only guess how long it will truly take for cars to be fully self-driving and operating all over cities,” says Groag. “The most optimistic views are five to 10 years and the most pessimistic is that this will never work in city centres.” Without driverless vehicles, ride-sharing could already reduce road congestion by a factor of three in New York while still serving the same number of passengers, according to a study released in January by the Massachusetts Institute of Technology. The researchers’ algorithm found that 3,000 four-passenger cars could meet 98 per cent of the city’s taxi demand while still achieving an average wait time of less than three minutes. Beyond all the hype, technology with the ability to enable this – in other words, apps like Uber – is an important factor in the strive towards a healthier, more sustainable future and more liveable urban environments.
Top: For Uber it’s a race against both the clock and Silicon Valley heavyweights like Google, who are developing their own driverless cars Above: A driver heads to a pick-up
“Today ride-sharing is only two per cent of urban transport in most cities around the world but in general, it will definitely become more popular,” says Villig. “In a few years we hope our company will be a strong alternative to public transport and owning personal cars.” The art of ride-sharing is definitely an important part of tomorrow’s transport but whether Uber itself is a key component for the future may depend on whether it can crack the formula for self-driving cars before somebody else does. Given their level of venture capital funding, provided the flow of money continues, this could be entirely possible. Will a combination of scandalous behaviour and financial losses soon stop Uber’s rise? It seems unlikely. As Groag says: “Negative publicity is also publicity. While some people have been [posting] #deletinguber, my guess is that the majority do not care, or at least not enough to stop using the app.”
Historically a byword for success, recent years have seen Harvard Business School come under pressure. John Moore asks if it can reinvent itself for the 21st century
SCHOOL OF HARD KNOCKS
here is a scene in the former Financial Times journalist Philip Delves Broughton’s 2008 book about Harvard Business School that might illuminate some of the issues the school has faced in recent years. This struggle begins in the opening days of his MBA programme when his professor, Richard Ruback, tells the anecdote of a student arguing with a school administrator. The student proclaims he is “the customer” and should be better treated. No, says the administrator, “you’re the product”. Professor Ruback’s riposte to the author’s class is: “I guess you’re somewhere in between.” Harvard Business School is the most prestigious school of its kind in the world – the name alone evoking images of captains of industry, chief executives, prime ministers and the one per cent. The school was set up in 1908, its aim
Below, Harvard today. From top, alumni Vincente Fox, Sheryl Sandberg and Steve Bannon
to train young men for a career in business as Harvard’s medical school trained doctors and its law school trained lawyers. Notable alumni include former Mexican president Vincente Fox, Facebook chief operating officer Sheryl Sandberg and controversial Breitbart owner and Donald Trump’s chief strategist Steve Bannon. With an endowment of $3 billion (Harvard’s total endowment is $33 billion, making it the richest university in the world), the school is also an economic powerhouse in its own right and the culture of the school permeates boardrooms and trading floors across the world. HBS, in some ways, is like a venture capital fund. They bet on 900 or so students each year and hope that five to 10 per cent of those will go on and make a difference in the world. There is no better advertisement for the school than the likes of Sandberg or Hank Paulson. The more successful the students in the working world, the
Students spend two years in a pressure cooker of case studies, presentations and networking
more the reputation of Harvard Business School grows and the more students want to apply. Of course, most of the school’s graduates don’t go on to change the world but the small percentage that do is enough to ensure the school’s reputation as the number one business school in the world remains intact. For the students who graduate, the two years they spend in Boston are a pressure cooker of case studies, presentations and networking – as close as they will come to the rigours of the corporate world before they set foot on Wall Street. The programme is part cult, part psychological test, part hothouse and not everyone makes it. For those that do, the rewards can be great: high paying jobs in corporate America and a piece of paper that is shorthand for excellence.
Harvard is the richest university in the world with an endowment of $33 billion
And, for all the talk of changing the world and making a difference, the majority of graduates end up in the banking and consulting world, pulling in huge salaries – a payback, if you will, for the cost of two years’ tuition ($122,000) and fees. With starting salaries for HBS graduates averaging $80,000, most would argue that the payoff is worth it. The application process is as daunting as you might expect. As much a marketing exercise (where the student is the product) as an application, most successful candidates have spent months working on their pitch. As well as college transcripts and Graduate Management Admission Test (GMAT) results, the key part of the application is the personal essay. This is what prospective candidates use to stand out. Why should HBS choose them? Clarity of purpose is crucial here – letting the decision makers know you are motivated, talented and passionate about changing the world. With an acceptance rate of just 13 per cent, competition is fierce. It helps if an applicant works for a big company such as McKinsey and Co, Booz, JP Morgan or Citigroup. Even better if you have been promoted during your
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“Most of the professors do not care about soft skills or cannot teach them. They get lost among all the focus on analysis and technique”
time there and can demonstrate how your work helped the firm make money. That, along with a world-class essay and two recommendations from your bosses, should ensure you at least get a fair hearing. Global experience helps too, as does some involvement with the tech sector, as Silicon Valley is increasingly snapping up business school graduates. Those that make it through the two years will emerge the other side as some of the most sought-after graduates in the world. It’s not all plain sailing, however and many criticise the entire business school model. One of the main criticisms aimed at Harvard Business School is that it is focused more on the scientific model of academia rather than the professional model (as applied by medical and law schools). An article in the Harvard Business Review in 2005 made the argument that “none of the top business schools would hire a professor whose primary qualification is managing an assembly plant, no matter how distinguished his or her performance”. Law and medicine schools more deliberately engage with the outside world with articles published in law reviews often cited in trials while most teaching staff in medical schools are also practising doctors. The article goes on to cite some of the most pressing questions facing business leaders: “How does a culture of celebrity affect leadership? How should a CEO be compensated? How does one design global operations so they are at once effective and equitable? What is the purpose of a corporation beyond the creation of shareholder value? Such broad, multifaceted questions do not easily lend themselves to scientific experiment or validation.” This was echoed in a 2011 article in Forbes, where the writer argued that HBS and business schools in general focused too much on hard analytic skills and not enough on soft skills. The writer quoted a McGill University professor called Henry Mintzberg: “Most professors do
Harvard Business School today and (top) students graduating in 1938
not care about [soft skills] or cannot teach them while most of the younger students are not ready to learn most of them. And few of these skills are compatible with the rest of the programme – they get lost amid all the hard analysis and technique.” Another issue is the MBA focus on business as a series of disparate parts, a world away from the reality of business leadership: seeing the big picture. Says Mintzberg: “MBA programmes provide specialised training in the functions of business, not general educating in the practice of managing. Most work that can be programmed in an organisation need not concern its managers directly; specialists can be delegated to do it.
SCHOOL OF HARD KNOCKS
That leaves the managers mostly with the messy stuff – the intractable problems, the complicated connections. And that is what makes the practice of management so fundamentally ‘soft’ and why labels such as experience, intuition, judgment and wisdom are commonly used for it.” Most analysts agree that leaders are not created in a classroom and leadership skills – the ability to motivate, for example – are not part of the MBA programme. The business world is changing faster than ever and becoming more globalised than ever, something that Financial Times’ Broughton points out in his book. Yet Harvard Business School has no more understanding of how and why the world is changing than anyone else. In many ways it is stuck in the early 20th century, a boys’ club that acts as a pipeline of talent for the big banks and hedge funds. For Broughton, there is a hypocrisy at the heart of the two years: “That the students are not only aiming to be the most powerful, the richest and most successful but also the most morally good.” So, at the same time as you learn how to make millions, you also learn how to become a philanthropist. Such hypocrisy is couched in business school jargon: graduates should display “heightened self-awareness” and “a strong moral compass” and acquire “leadership and values”. These terms, as the author points out, are meaningless, particularly when the graduates who are spoon-fed these platitudes end up working for a Wall Street hedge fund. Another issue, highlighted in a New York Times Magazine story in 2012, is the gender inequality that female students face. “Many Wall Street-hardened women confided that Harvard was worse than any trading floor, with firstyear students divided into sections that took all their classes together and often developed the overheated dynamics of reality shows,” the article’s author Jodi Kantor wrote. You could argue part of the problem is that HBS is the most prestigious and therefore the most visible business school in the world. Problems there are echoed across the business world, from boardrooms to the business media. Given the 2008 crash and the low regard much of the world has for bankers, it is no surprise many see the MBA programme as an elitist training ground for the next generation of Wall Street titans. Indeed, it was once a point of pride for MBA graduates to compete with each other over how long they worked: 16 hour days were the norm, along with weekends spent in the office. Things are changing, mainly down to the allure of Silicon Valley, the only industry that can match Wall Street salaries as well as give a
Current secretary of commerce in the Trump administration who made his name in leveraged buyouts
2012 presidential candidate and former governor of Massachusetts
Disgraced former Enron CEO who is currently in an Alabama prison as a result of the Enron scandal
Renowned self-help author, of books such as 7 Habits of Highly Effective People
Former secretary of defence and president of the World Bank
“Female students said Harvard ended up with the dynamics of an overheated reality show”
Former mayor of New York and the founder of Bloomberg
quality of life that is impossible for young finance grads. In 2007 about 13 per cent of Harvard MBA graduates who got jobs landed them in investment banking or trading. By 2014, that number had fallen to five per cent. Keima Ueno, a recent Harvard graduate, told Bloomberg Businessweek in 2015 he wasn’t surprised with the shift. “When we hear that our classmates managed to acquire a position with an investment bank, we say: ‘Congratulations,’’’ he said. “But we are thinking: ‘I’m sorry to hear that.’’’ Wall Street, predictably, has not given up without a fight. Things started to change after the death of a Bank of America intern in 2013. Moritz Erhardt, a 21-year-old German, died of an epileptic seizure after working 72 hours in a row. That led the big banks to ensure staff got more time off, less pressurised deadlines
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From top left: Goldman Sachs HQ, Google HQ and Wall Street, where many HBS graduates end up
and training to ensure they are able to maintain some semblance of a work/life balance. Goldman Sachs even invited Deepak Chopra to speak to staff about wellness. The motives are not entirely altruistic, however: the big banks are alarmed at the brain drain west to San Francisco. As tech company salaries have risen, Wall Street’s have fallen, partly because of a drop in revenues, partly because of an increased focus by regulators and shareholders on employee bonuses. Goldman Sachs’ average employee package fell from more than $661,000 in 2007 to $373,000 in 2014. The business schools are aware of this, with Ueno telling Bloomberg Businessweek that in his Harvard class, there were “several case studies dealing with investment banks where students discuss the brutal work environment
Many of the big banks are alarmed at the brain drain from Wall Street to Silicon Valley’s tech companies
and incredibly out-of-whack work/life balance. The banks’ efforts – their success or lack thereof – to bring about change have not been discussed but what is consistently highlighted is the dark side of investment banks”. It is impossible to know if Wall Street can change its working culture. The smart money would be that it cannot but for HBS graduates, the rise of Silicon Valley as a career option can only be a good thing. As for the future of Harvard Business School, it is impossible to tell. The school does its best to reflect the working world. If it is seen as elitist, out-of-touch and greedy, perhaps that merely reflects the corporate world. As Broughton pointed out in his book, Harvard wants your best self, if not your true self. He quotes from a student guide on what to bring: “Don’t bring that guitar. Don’t bring any books from literature or history classes. Don’t bring your cynicism. Do bring all the diverse rest of you. We can’t wait to share the experience.” Whether that experience will change as the world we live in changes remains to be seen.
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THE NEXT DOLLAR
Every since Tupac appeared as a hologram on the stage of Coachella in 2012, technology has begun to change the entertainment industry. Chris Young investigates
THE NEXT BILLION-DOLLAR BUSINESS?
n the summer of 2012, a ghost appeared on the stage of the Coachella music festival in southern California. More than 15 years after he was killed at a tragically young age, the iconic Tupac Shakur performed alongside fellow rap superstars Snoop Dogg and Dr Dre. It was the largest live audience he had ever appeared before. The internet embarked upon a period of meltdown at the rejuvenated sight and sound of Tupac. The footage has been viewed more than a billion times since. Of course, there was a helping hand to Tupac’s resurrection. He hadn’t risen from the dead. Instead, it was a painstakingly accurate hologram of the late artist, which was projected onto the stage and synched with the music. But it was a groundbreaking moment. It proved to be the catalyst for an increasingly prevalent use of holograms in music, movies, entertainment and politics. Since then, the lost stars of the past have risen from the grave at a rapid rate. The likes of Whitney Houston, Bob Marley and Liberace are heading back on the road. “Other than Princess Leia in Star Wars, I think Tupac is probably the most famous hologram. That got the whole thing started in my opinion,” says David Nussbaum, senior vice president at Los Angeles-based company Hologram USA. “The two songs that he performed at Coachella charted for the first time since he [died]. He became a pop culture icon again and generated a brand new fanbase. That performance is probably the most viewed performance of Tupac and it wasn’t even him. It was a hologram version of him.” Hologram USA was started in 2014 after Greek billionaire media mogul Alki David purchased the patent to the technology that created the Tupac vision. It has subsequently created holograms of a host of celebrities, both living and dead. There are several similar companies across the globe with the rights to display images of various performers. It’s a mark of how fast the hologram industry has grown since that Tupac moment. The Hollywood Reporter has even labelled it as the next “billion dollar business”. To be pedantic, the images are not holograms, rather a version of a 19th century magic trick called ‘Pepper’s Ghost’. Invented by engineer
THE NEXT BILLION-DOLLAR BUSINESS?
Tupac ‘performs’ with Snoop Dogg during the 2012 Coachella Festival
Henry Dircks and then made famous by scientist John Henry Pepper, angled pieces of glass were used to project a three-dimensional image to amazed Victorian audiences. Even Queen Victoria was treated to a performance. But the
“Other than Princess Leia in Star Wars, I think Tupac is probably the most famous hologram. That got the whole thing started in my opinion”
ghostly reflections of the past have now evolved into cutting-edge technology. The modern holograms are created using patented plastics and high-resolution projectors rather than giant mirrors. Such convincing images spark a diverse range of uses. Special events, such as music festivals, remain ideal for creating the ‘wow’ effect from the apparition of a performer who is no longer alive. Holograms of late Latin American favourites Jenni Rivera and Juan Gabriel have both taken to the stage in recent months in Mexico and the US. But holograms are also being used in more prolonged performances. A Whitney Houston hologram is due to embark upon a global tour this year, with a similar project involving Billie Holiday nearing completion. Years after their deaths, these artists are going back on the road. Nussbaum’s vision is for a network of hologram theatres to develop. “The big plan is to create full hologram shows of your favourite artists – Whitney Houston, Buddy Holly, Liberace,” says Nussbaum. “These shows will either go on tour from city to city like any other concert or we’ll build hologram projection stages in existing venues. You could go to Vegas and when you’re driving down the Strip, you’ll see Liberace ‘performing’ tonight. It’s not an impersonator singing. It’s really his music. “The families have to approve every hologram that happens. When we beam the hologram into an event in front of all their fans, I see the emotions of the relatives. They’re seeing their dad perform, sometimes for the first time.
THE NEXT BILLION-DOLLAR BUSINESS?
“At that stage, it becomes that more than just a job, more than just a form of entertainment. It’s a person. We’re talking about a real person whose family is now trusting Hologram USA to extend the legacy.” Gaining the consent of the deceased performer’s estate can take months and even years of talks before the final approval is given. Hologram rights are an increasingly complex legal field. Hologram USA is generally in discussions with at least six living performers and the estates of at least six deceased celebrities. The families of Whitney Houston, Judy Garland and comedians Redd Foxx and Andy Kaufman are among the notable names who have recently penned contracts with the company. Houston is a particularly notable attraction and a long-term project for the business. It has not been without its hiccups after an incomplete image of the singer performing a duet with Christina Aguilera leaked last year when the intricate details of the projection had not yet been completed. But given Houston’s massive popularity at her peak and her untimely death in 2012 at the age of 48, it is one the company has high hopes for. “We are working on a full-length show that will tour and be a one-hour show showing Whitney at different stages of her life,” says David. “I’m confident we’ll create the ultimate celebration of Whitney’s amazing artistry. These deals we make are really predicated on working really closely with the estates. “The musical arrangement, the choreography, right down to the lighting and the design, are done
Suspending an audience’s disbelief hinges on making the holograms as realistic as possible
with the original artists and original technicians who worked with Whitney in the past. That enables us to maintain absolute authenticity.” Suspending the disbelief of an audience hinges on making the holograms as genuine as possible. Thousands of hours of footage are sifted through by production staff to ensure the right mannerisms appear in the recreation of the entertainer. It can be behaviour as minor as which hand they use to take the microphone off its stand. Nussbaum says: “We watch music videos, movies, home videos, pictures. We study them and give it all to our artists. We’re not using any of those pictures to be the hologram. We just use that as reference material so our artist can go in and build anyone from head to toe. “The hologram is then synced up to authentic music so it’s not an impersonator singing, it is the person singing. When we beam a hologram,
THE NEXT BILLION-DOLLAR BUSINESS?
we ask the estate what they think. They might say, ‘They didn’t grab the microphone like that.’ So then we go back and fix it. We want to make sure it is as authentic as possible because the superfan sitting third row centre needs to go ‘wow’.” But holograms are not merely limited to the deceased. They are also playing an increasingly prevalent part for the living. The stars of the Fast and the Furious movie appear via hologram on a high-octane ride at Los Angeles’ Universal Studios theme park. As an advertising tool, holograms of the latest cars and gadgets have appeared in front of mesmerised shoppers. It’s a far more powerful image than one in a magazine or on a television screen. Perhaps the most intriguing use of the technology is when stars are beamed live though. From a studio in California they can be broadcast via satellite to anywhere across the world.
Above left to right: A security guard looks at a hologram during a show at the Royal Academy in London in 1978; a hologram of Michael Jackson at the 2014 Billboard Music Awards; a hologram of model Kate Moss on the catwalk at the Alexander McQueen fashion show at Paris Fashion Week, 2006
Performers are even able to see the audience through a video monitor and engage with them. American talk show host Jimmy Kimmel has been a notable proponent of the technology after presenting the Country Music Awards in Nashville via hologram for the last three years. He has simultaneously appeared on his nightly show in LA 2,000 miles away. “As country artists were accepting their awards, they would go onto our stage and we’d beam them back to Hollywood to either be interviewed by Jimmy Kimmel or perform live as a band on his concert stage,” says Nussbaum. “It was a double hologram beaming and we could get really creative.” Actor Jack Black took part in a question and answer session in Madrid in between filming for a new movie in Hollywood. He was able to promote his movie to an audience of journalists
THE NEXT BILLION-DOLLAR BUSINESS?
without leaving the country. Predictably the hologram created as many headlines as the film. Controversial Wikileaks founder Julian Assange even fulfilled a speaking engagement in the US from his confinement in the Ecuadorian embassy in London. “We transmitted Julian Assange live from the Ecuadorian embassy to the Nantucket Project in Massachusetts,” says David. “He would be arrested if he set foot in the States so the use of the technology is great because you can project a live representation of your image to these places.” Holograms are even entering politics. Indian prime minister Narendra Modi addressed more than 1,000 rallies as a hologram during his election win in 2014. Many of these were held simultaneously and gave him the opportunity to address millions of potential voters. Those in particularly remote communities were as captivated by the holograms as the content of the speeches. “It is the safest way to campaign because you don’t have to leave the studio,” says Nussbaum. “The now sitting prime minister of India, Narendra Modi, was an underdog but used our technology to beam into 100 mobile units every other day. He got in front of more voters than his rival. A lot of people saw him just so they could see what a hologram looks like – but he was elected as prime minister by a landslide.” As the technology improves, the obvious discussion is whether holograms will become a tool of everyday life. Will Skype conversations be conducted with a hologram, rather than a flat screen? It is far from fanciful. At present it’s a pipedream, but in 10, 20 or 50 years’ time? There is a real chance. David says: “We’ve really only scratched the surface of what we can do. The technology doesn’t get worse over time, it only gets better.” Nussbaum adds: “A lot of virtual reality companies are talking about seeing holograms with the headsets on but I think there is a version of what we do where we alter reality – either in a VR world with a headset or in a shared experience, which is what we do. There are guys in other countries doing what we do and we learn from each other. “I do believe at some point, this will be the Skype equivalent.
People will be able to push a button and a hologram of their friend or mother will appear in front of them. Maybe it will be a small image or a full-size one. Who knows?” The chance to see some of the most influential figures from history is currently at our fingertips though. Tupac is not going to be the last hologram to make a global splash. David has already spoken about his eagerness to resurrect The Beatles. Nussbaum thinks there could be holograms from even further back in time taking to the stage as well. “I would love to see Richard Prior perform, Einstein speak in a museum, Abraham Lincoln recite the Gettysburg Address and Martin Luther King tell us about his dreams,” says Nussbaum. “Instead of just seeing it on a flat screen, in a movie or documentary, you can see it happening right in front of you. It’s so much more than entertainment.”
“Modi got in front of more voters than his rival. A lot of people just wanted to see him as a hologram”
Top: An image of then-prime ministerial candidate Narendra Modi is pictured during a live 3D hologram telecast in Allahabad, India, on April 14, 2014 Above: Crowds watch a hologram of Modi at a rally in 2014
A collection of inspirational quotes from
Sheikh Zayed bin Sultan Al Nahyan a man who fought for unity, preached equality and transformed the UAE.
‘I had many dreams. I dreamt of our land keeping pace with the growth of the modern world.’ – S H E I K H Z AY E D B I N S U LTA N A L N A H YA N
ava i l a b l e i n a l l m a j o r b o o k s t o r e s a n d at b o o k s a r a b i a . c o m
# Fat h e r O f O u r N at i o n
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Imperial class The Sacher is one of Europe's grand hotels and manages to combine state-of-the-art hospitality with old world charm
LIVING / HOTEL
HOTEL SACHER, VIENNA
WHERE TO STAY
PRICE From $500 per night
ne of Europe’s great old hotels, the Sacher has been catering to the world’s elite since 1876. The building, located directly across from the Vienna State Opera House, oozes old world charm. The heritage is obvious as soon as you walk in the door, with the walls surrounding the reception desk filled with photographs of the luminaries who have stayed here (everyone from Queen Elizabeth II to Pavarotti). The hotel is something of a tourist attraction in Vienna, largely down to its Sacher torte, a rich, calorie-laden chocolate cake that has to be tasted to be believed. It was invented by the father of the hotel’s owner, Eduard Sacher, who, along with his wife Anna, built the hotel into the icon it is today. Its status can be gauged from the groups of tourists lining up to enter the
There is a genuine warmth to the interactions here. At times it feels like a familyrun boutique hotel
hotel’s cafe. Possibly more impressive than the cafe is the restaurant Rote Bar, a marvellously old-fashioned place dominated by its red walls and carpet and at once exuding both a cosy atmosphere and sophisticated allure. The rooms are stunning, each room individually furnished with original artworks hanging on the walls. The topfloor rooms even have large terraces with views over the centre of the city and beyond. This is a modern twist on old world charm and the decor and the presentation hit just the right note. Equally impressive are the staff – with 360 on hand to cater to 149 rooms, there is no shortage of help available. The service is always helpful without being oppressive. Vienna is one of Europe’s great capitals and in the Sacher, it has a hotel that lives up to its billing.
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FROM THE CONCIERGE
Albertina One of Europeâ€™s great galleries, the Albertina is home to more than 45,000 works of art, including pieces by the likes of Klimt, Picasso and Warhol. It is also currently showing a wonderful photography exhibition on the history of film. A must-see.
Loca An intimate restaurant on Stubenbastei Street, Loca has won plaudits for its eclectic range of fresh ingredients and its fine dining ethos. A perennial favourite among locals, you will need to book a table in advance.
Bananas An eclectic mix of mid-century furniture, vintage curios and custom jewellery, Bananas is one of the cityâ€™s most interesting shops. Prices range from $50 upwards so there is something for everyone here.
MAY LIVING / INVESTMENT
Rolex Oyster Perpetual Sky-Dweller The ubiquitous Oyster Perpetual ups the ante with a constellation of technological and luxury elements
Oyster case, waterproof to a depth of 100 metres
Fluted ring command bezel for quick and easy setting of functions
Dual time features with 24-hour display allowing global travellers to reference multiple timezones
Saros annual calendar, inspired by the Greek term to designate 18-year cycles of alignment between the sun, the Earth and the moon
Black alligator leather strap, equipped with a folding Oysterclasp
brand that takes tradition seriously, this year Rolex celebrates 60 years of its association with equestrian institutions and iconic events around the world. Its long-term partnerships with top performing riders include US Olympic showjumping champion Kent Farrington, who wore this model during one of the sport’s most celebrated events last month, the Winter Equestrian Festival in Palm Springs, Florida. The Oyster Perpetual Sky-Dweller is the quintessential classic sports timepiece designed for luxury-loving citizens of the world. It comprises a dual timezone feature that allows the wearer to multitask across continents and is protected by 14 individual design patents, including a freshly minted interface: the rotatable ring command bezel. The Sky-Dweller has even given its sophisticated calendar mechanism a name – Saros, a nod to the astrological phenomenon – securing its place among horology’s most coveted collectibles.
LIVING / STYLE
What to pack ...for spring weather in New York and beyond
Marrakesh Nice San Francisco Majorca
ALSO WEAR IN...
21°C 18°C 17°C 19°C
Chance of rain: 35%
WHAT TO SEE
THE HIGH LINE A remarkable idea, executed brilliantly, the High Line is a 1.45mile stretch of elevated railway track turned into a public park. Essentially a wooden walkway bordered by greenery, the High Line has revitalised the neighbourhoods it journeys through and become something
of a cultural hub. Art installations have sprung up along its route, and an urban theatre plays host to impromptu performances. The park changes depending on the time of day that you go. Early morning is filled with joggers and commuters while early evening sees tourists and couples stroll along its length.
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1. Arpenteur hooded jacket $546 2. Howlinâ€™ striped wool cardigan $235 3. Michael Kors linen shirt $170 4. Lanvin jacket $1,750 5. Eidos cotton jersey tee shirt $159 6. Officine Creative Chelsea boots $472 All products available at mrporter.com
ACCESSORIES 2 1
Prada leather-trimmed backpack $1,378
Thom Browne silk jacquard tie $254
Thom Browne leather billfold wallet $541
81 Prada rubberised acetate sunglasses $238
LIVING / STYLE
What to pack ...for spring weather in London and beyond
Paris Barcelona Vienna Budapest
ALSO WEAR IN...
15°C 16°C 15°C 15°C
Chance of rain: 40%
WHAT TO SEE
BRITISH MUSEUM One of the world’s great cultural destinations, the British Museum is home to more than eight million works. Set up in 1753, the museum focuses on the history of everywhere from Ancient Egypt to Greece, Rome and prehistoric Europe. Highlights are many but include the Rosetta
Stone, a selection of Egyptian mummies and the Elgin Marbles. It is almost impossible to see everything in one visit but as admission is free, repeat visits are easy. Spanning more than two million years and home to a number of exhibitions, it is easy to see why this is one of London’s most visited attractions.
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1. Gucci reversible wool and silk cardigan $2,099 2. See by Chloe suede bomber jacket $625 3. Alexandre Birman suede sandals $557 4. Miu Miu printed cotton poplin top $519 5. Altuzarra Harding embellished wool sweater $1,055 All products available at net-a-porter.com
Bowie embossed leather iPhone 7 case $106
Chloe Myrte square-frame sunglasses $260 5
83 Olympia Le-Tan Word Image appliqued cotton-faille clutch $1,378
LIVING / FOOD
Top Table James Brennan talks to the Indian chef aiming to change the way the world perceives his country’s cuisine
anish Mehrotra is a man on a mission. Not content with opening a New York outpost of his New Delhi restaurant Indian Accent last year, the 43-year-old chef now has his sights set on London. The goal: to bring his internationally attuned Indian cuisine to a global audience and to do it with style. Opened in 2009, the original Indian Accent was recently ranked 78th best restaurant in the world for its take on traditional Indian food. But while Mehrotra has his eyes on some prime locations in Mayfair and Knightsbridge for its latest iteration, the bigger picture involves showcasing to the world a cuisine he feels has been misrepresented outside India. “Everybody thought we were a country of just curry and naan bread, which is not true,” he says with a hint of exasperation. “Even chefs who started cooking ‘real’ Indian food got confused between India as a land of spices and India as a land of chilli. But
I want to tell the world India is a land of spices, not chillies. We believe in spice blends and flavours in the dish rather than numbing your mouth with a whole bunch of chillies.” He has a point. Along with the tomato and potato, the chilli pepper is a relative newcomer to the dinner tables of the subcontinent. Its introduction to India by Portuguese traders in the 15th century had a powerful impact on an already ancient and complex cuisine, proving that globalisation was just as potent a force then as it is today. The story of Indian food has been shaped by Persian, Arabian, British, European and Chinese influences. Now Mehrotra is reimagining Indian food in a modern fine-dining context and sending it back out into the world. “You can say it’s modern Indian food but it’s more like inventive Indian food,” he says. “They are the same dishes reinvented in a global manner – that’s international ingredients and presentation style without compromising on traditional flavour or taste.” By the time the New York branch of Indian Accent opened in February last year, there was already a buzz about the place. “People had not seen anything like it before,” says Mehrotra. “Firstly it was a different kind of Indian restaurant. We were the first to do one without biryani, kebabs, chicken tikka masala or saag paneer. It was completely different. The flavours were traditional but the presentation and ingredients were quite modern. We were the first ones to focus on seasonality.” The moment softshell crabs appeared in New York fish markets, they went on the menu. In a break with Indian tradition, beef was used instead of lamb in pathar kebabs with bone marrow nihari. And the kulcha stuffed with Peking duck and hoisin sauce, which ruffled so many feathers
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LIVING / FOOD
in New Delhi when it first appeared, materialised in New York with pastrami and mustard. Indian Accent had picked up a New York drawl. And so to London. Britain’s long love affair with Indian food produced such delicacies as chicken tikka masala and the balti. Both dishes have become
“Indian food is still considered a cheap, greasy take-away kind of cuisine. There is not that much respect given”
world famous. But while some purists shun these Anglo-Indian hybrids for their inauthenticity, Mehrotra isn’t one of them. “When I used to work in London I stayed in Bow, which is quite near Brick Lane, so I have tried all those dishes,” he says. “I have never judged them as an Indian or as a chef so I didn’t find anything offensive about them,” he says, adding that he has no plans to incorporate them into his London menu. “When we get going it will be wonderful to do my take on a chicken madras or a Bombay aloo, which don’t exist in India,” he says. But whatever Indian Accent’s London menu has in store, Mehrotra’s inquisitive nature is sure to shine through. “What I do is explore more of Indian cuisine,” says Mehrotra. “Even in India, we have to explore more [as] a lot of people do not know about their own country. So rather than innovating, if we explore our own different parts of India, we can find thousands of dishes that can be served in a fine dining restaurant.” Indian fine dining is still very much in its infancy. The likes of Vineet Bhatia and Atul Kochhar raised the bar when they earned Michelin stars in London in the early 2000s. While they are still active and successful, it is a bold new generation of chefs such as Gaggan Anand (Gaggan, Bangkok), Srijith Gopinathan (Campton Place, San Francisco) and Mehrotra who are propelling Indian fine dining to the next level and new heights.
Anand’s experimentation with Indian street food classics and molecular gastronomy are perhaps what’s needed to propel Indian food into the same culinary stratosphere as Nordic or modern European food. Gaggan recently clinched seventh spot in the World’s 50 Best Restaurants awards. But there remains a problem for chefs like Anand and Mehrotra. No matter how ingenious and sophisticated Indian cuisine in all its many forms can be, it still struggles to shake off its curry house image. “Until now there is still not that much respect,” admits Mehrotra. “We are still considered [to be] a cheap, greasy, takeaway kind of cuisine. It’s not about the spices or the complex nature of Indian food – it’s because it was not represented properly outside India. But things are changing now and in the last two years Indian cuisine is becoming more prominent and getting more respect.” When it comes to changing the way the world sees Indian food, Mehrotra’s mission has only just begun.
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FIVE TO TRY 1. Campton Place, San Francisco, US Californian meets Indian at this two-Michelin-starred groundbreaker in San Francisco. Executive chef Srijith Gopinathan’s food combines the restraint and sophistication of European-influenced west coast cuisine with the subtle and ingenious flavours of the subcontinent, which makes this Taj Hotel restaurant well worth a detour.
2. Gaggan, Bangkok, Thailand Named Asia’s best restaurant for the last three years and the seventh best restaurant in the world, Gaggan takes an Indian street food aesthetic and gives it a molecular twist. A product of Ferran Adria’s Barcelona research lab, chef Gaggan Anand plans to close the restaurant in 2020 and relocate to Japan so miss out at your peril.
3. Lasan, Birmingham, UK Once hailed as the UK’s best local restaurant by Gordon Ramsay, this gem of a progressive Indian in Birmingham’s historic Jewellery Quarter enlivens choice British ingredients with authentic and exciting Indian flavours. Chef Aktar Islam has three other restaurants in the city, including an Argentine steakhouse but still finds the time for the occasional TV appearance.
4. Masala Library, Mumbai, India You’re just as likely to find liquid nitrogen and lecithin emulsifiers as cumin and coriander at this Indian in Mumbai. While chef Jiggs Kalra embraces all things molecular, he retains a firm a grasp of the traditions of his national cuisine, making membership of Masala Library a must.
5. Quilon, London, UK Chef Sriram Aylur’s focus may be on the food of India’s southwest coast – from Goa to Kerala – but his outlook is thoroughly international at this St James’ Court Hotel restaurant. Close attention to seafood and a combination of classic dishes and contemporary methodology have earned Quilon a muchdeserved Michelin star.
LIVING / CONSUME
Drive time A new photography exhibition examines our relationship with cars
must-see for lovers of cars or photography, Autophoto takes place at the newly renovated Fondation Cartier. Comprising 400 works from 80 photographers, including RosĂ˘ngela Renno, Juergen Teller, Jacques-Henri Lartigue and Langdon Clay, the works span more than 70 years. They showcase how we use the car to explore the world and how deeply car culture has permeated societies across the globe. Witness the car as a mode of transport
and as an object of desire as well as a cultural touchpoint that tells us a lot about who we are. The exhibition also features a series of car models from French artist Alain Bublex, which seek to re-examine our relationship with the car. The foundation, founded in 1984, is located in a spectacular building designed by Jean Nouvel and is worth a visit for the architecture alone. Open daily except Mondays, it is one of Parisâ€™ cultural highlights. Fondation Cartier, from April 20. fondationcartier.com
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Clockwise from bottom left: Washington DC, 1964, by Ray K Metzker; MELT, Toyota No 8, 2005, by StÃ©phanie Couturier; Citroen Traction 7, 2012, by Peter Lippmann; Badly Repaired Cars, 2016, by Ronni Campana; 280 Coup, 2012, by Justine Kurland; Los Alamos 19651968 by William Eggleston
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LIVING / COLUMN
Extreme you By Sarah Robb O’Hagan
ot everyone is a winner. Too many people get this backward. They look at a challenge, a mountain peak way up in the clouds and they think: “That’s too hard. I don’t have the energy/commitment/stamina to do that.” They make the mistake of first measuring the distance to the goal – wow, that mountain peak looks pretty high – and then checking within themselves to see if they have the drive to meet it. And what do they find? They don’t have it. They have no idea how they’d do it. But they’ve misunderstood how drive works. You don’t get a fixed amount of it, like gas in a tank. Or, should I say, it might be fixed on any given day, but over time, unlike a car’s gas tank, your ‘tank’ will grow in proportion to where you are trying to go if you keep pushing and challenging yourself. That’s one of the most valuable things I know. Magic Drive is a resource I have returned to over and over again throughout my life and it has propelled me to achieve things I would have never thought possible. So it breaks my heart to realise that these days the cultivation of this resource is endangered. It was a shock to me when I was fortunate enough to start a family in America to discover the widespread belief that kids shouldn’t experience losing. “Everyone’s a winner,” they are told. Every kid gets a trophy. I have seen this with all three of my kids – two boys and one girl – when they started playing soccer. Don’t get me wrong, all my kids are energetic young soccer players and I don’t think they would be upset to hear me say that none of them appear destined for professional soccer greatness. Yet sporting organisers routinely go to great lengths to cover up which kids are playing at a higher level than others. Their
team names – like Black Wolves or Tsunamis – don’t reveal it. Back when I was a field hockey player, I understood when I was on the B team. When I played tennis, I knew I was at the C level for interclub play. But my kids didn’t know and when we tried to tell them they needed to train to get to a better level, they didn’t have much motivation. Weren’t they already Tsunamis? So why look for higher mountains to climb? This is a national trend. As Ashley Merryman pointed out in The New York Times, local branches of the American Youth Soccer Organization spend up to 12 per cent of their yearly budget on trophies alone and the trophy and award industry is worth roughly $3 billion a year in the United States and Canada. Did you hear that? An entire industry dedicated to suppressing our kids’ potential by rewarding them before they have even won anything. Now I know it’s nice to see your kid with a trophy. But for the kids I’m afraid it can be very confusing. After reviewing the psychological literature on telling everyone he or she is a winner, Merryman concluded: “Non-stop recognition does not inspire children to succeed. Instead it can cause them to underachieve.” Kids as young as five have been shown to know very well who played better and who played worse. When everyone gets a trophy, those who played better feel cheated and those who played worse realise they don’t deserve it, which makes the reward lose its power. Over time, all those trophies make it harder to succeed because they sap motivation and give a false sense that life will be easy. As the psychology professor Jean Twenge put it: “You’re going to lose more often than you win, even if you are good at something. You’ve got to get used to that to keep going.”
“When everyone gets a trophy, those who played better feel cheated and those who played worse realise they don’t deserve the trophy”
90 From Extreme You by Sarah Robb O’Hagan © 2017. Reprinted courtesy of Harper, an imprint of HarperCollins Publishers
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