Month: January 2020

Entrepreneurs Dream of Transportation Breakthroughs

(p. A13) “Hop, Skip, Go” seems to be the result of an extended reporting trip, during which the authors chat with would-be game-changers from Los Angeles to Helsinki to Dubai to Guangzhou, offering futuristic punditry along the way.

. . .

The authors have tracked down entrepreneurs who are following their dreams of shaking up passenger transportation. In Shanghai, we meet Joseph Xie, whose Shanghai Quality Sensor Technology Corp. specializes in tiny semiconductors that sense light, sound and motion and have a wide application for autonomous vehicles, among other uses. In the Detroit area, R.J. Scaringe’s company, Rivian, aims to build electric cars and recently captured a $500 million investment from Ford. In Helsinki, an engineering student named Sonja Heikkilä wrote a thesis proposing a mobility app that would allow subscribers access to every sort of conveyance, from dockless scooters to rental cars. Mark Moore, a former NASA researcher now with an Uber venture called Uber Air, envisions small aircraft allowing users to fly over traffic jams within a decade.

For the full review, see:

Marc Levinson. “BOOKSHELF; Going Mobile.” The Wall Street Journal (Tuesday, December 3, 2019): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date Dec. 2, 2019, and has the title “BOOKSHELF; ‘Hop, Skip, Go’ Review: Going Mobile.”)

The book under review, is:

Rossant, John, and Stephen Baker. Hop, Skip, Go: How the Mobility Revolution Is Transforming Our Lives. New York: Harper Business, 2019.

Venture Capitalist Don Valentine Was Rare Early Backer of Apple

(p. A9) In the mid 1960s, Don Valentine had a hunch that startups using silicon semiconductors, then a new technology, would thrive. After failing to persuade his employer, Fairchild Semiconductor Corp., that it should invest in some of its more promising customers, Mr. Valentine decided to invest on his own.

His hobby became Sequoia Capital, which over the following five decades has built an unrivaled record of venture capital investing, betting early on Atari and Apple Inc. in the 1970s, Cisco Systems Inc. and Oracle Corp. in the 1980s, Yahoo! and Google in the 1990s, Airbnb Inc. and LinkedIn Corp. in the 2000s, and Stripe Inc., Square Inc. and WhatsApp this decade.

Mr. Valentine handed the reins to a new generation of investors in 1996, but the firm still operates in his image—as a team of hard-nosed investors willing to butt heads inside company boardrooms and who relentlessly question each other and those seeking their capital.

. . .

Atari founder Nolan Bushnell says Mr. Valentine was by far his best board member. “We fought like cats and dogs,” recalled Mr. Bushnell. “Steel sharpens steel. Every board meeting, he would ask me a question about my company that I didn’t know but I immediately knew that I should know it.”

Mr. Bushnell introduced Mr. Valentine to a young Atari employee named Steve Jobs, who had an idea for a personal computer but whom other investors wouldn’t back, in part because of his messy appearance.

Mr. Valentine said in the 2009 interview that one of Sequoia’s secrets was its Socratic method, in which partners constantly questioned one another. He recalled in the same interview that Mr. Jobs stood out as one of the “best interrogators” he ever saw. “Somehow or other, he knew what to focus on and how to build a sequence and series of questions that were additive to the answers.”

For the full obituary, see:

Rolfe Winkler. “Venture Capitalist Gave Entrepreneurs Tough Love.” The Wall Street Journal (Saturday, November 2, 2019): A9.

(Note: ellipsis added.)

(Note: the online version of the obituary has the date Oct. 27, 2019, and has the title “Venture Capital Pioneer Kept Entrepreneurs’ Egos in Check.”)

Amazon Enables Flourishing of Small Diverse Entrepreneurs

(p. A24) They are a religious community known for clinging to 18th-century fashions and mores — strict rules that keep men and women apart and constraints on attire, with men favoring black suits and formal hats and women in long sleeves and long skirts.

But when it comes to doing business, Hasidic Jews have become enamored with a distinctly 21st-century company: Amazon.

The ability to sell merchandise easily and relatively anonymously on Amazon has transformed the economies of Hasidic enclaves in Brooklyn, suburban New York and central New Jersey, communities where members prefer to keep to themselves and typically do not go to college, let alone graduate from business programs.

But Amazon allows Hasidim to start selling without much experience and without making the investments required by a brick-and-mortar store. It permits Hasidic sellers to deal with the public invisibly — almost entirely by mail, by email or through package-delivery firms.

“Amazon doesn’t ask for your résumé,” said Sam Friedman, a marketer who designs trade show exhibits and works with many Amazon sellers. “And your picture is not on your business. The investment is minimal. You can work out of your bedroom.”

. . .

If Amazon is fulfilling orders, the business may effectively be running on Sabbath and Jewish holidays, though how that is carried out is the subject of vigorous debate. With a Talmudic twist of logic, some Hasidic entrepreneurs take on a non-Jew as a presumptive partner, attributing profits made on the Sabbath to that person.

. . .

Mr. Friedman is . . . organizing a business, advertising and marketing expo in Brooklyn in December [2019] to help Hasidic merchants expand their online sales by contracting with experienced copy writers, web designers, videographers and other professionals whose occupations the Talmudic Sages never even dreamed of.

“We’re not college students,” Mr. Friedman said, “but the yeshiva makes us smart enough to figure things out.”

For the full story, see:

Joseph Berger. “Insular Hasidic Communities Embrace Selling on Amazon.” The New York Times (Thursday, October 17, 2019): A24.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Oct. 16, 2019, and has the title “How Amazon Has Transformed the Hasidic Economy.” The online version says that the article was on p. A26 of the New York edition. The article was on p. A24 of my National edition.)

Openness on Display at Oxford Booth at AEA Meetings

Founding Entrepreneur Still Runs FedEx

Clayton Christensen plausibly argues that in the rare cases where an incumbent firm has been able to disrupt itself, it is almost always a firm where the founding entrepreneur is still running the firm.

(p. A1) MEMPHIS, Tenn.— Fred Smith bristles at any hint that FedEx Corp., the global delivery giant he built over four decades, could be disrupted by a player such as Amazon.com Inc.

. . .

FedEx’s 75-year-old chairman and chief executive, the man who pioneered the business of moving packages around the world at lightning speed, is confronting some of the greatest threats to the company he founded.

Global trade is slowing and tariff (p. A9) fights have companies rethinking supply chains. A key partner, the U.S. Postal Service, is struggling. Amazon has morphed from a customer into a competitor.

. . .

Mr. Smith, a former Marine officer and decorated Vietnam War veteran, started FedEx in 1971 and has been CEO for nearly its whole history. The billionaire was preparing to hand over the reins, but he extended his stay after two top executives, including his heir apparent, abruptly left.

That has left Mr. Smith, who remains one of FedEx’s biggest shareholders, to revamp the business. He started with divorcing Amazon.

For years, Amazon has been building up its logistics operations to handle more deliveries itself. The online retailing giant added tractor-trailers, hundreds of sorting centers and dozens of cargo planes to carry millions of its packages. It now delivers nearly half its orders, compared with less than 15% in 2017, according to estimates from research firm Rakuten Intelligence.

In February [2019], Amazon noted in its annual report that it views companies in “transportation and logistics services” among its rivals.

“They had never done that before that day,” Mr. Smith said. “So we took it seriously.”

For the full story, see:

Paul Ziobro. “FedEx Chief Reinvents Firm He Founded.” The Wall Street Journal (Friday, October 18, 2019): A1 & A9.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date Oct. 17, 2019, and has the title “Fred Smith Created FedEx. Now He Has to Reinvent It.”)

E.U. Farm Subsidies in Central and Eastern Europe Go to Cronies of Politicians

(p. 1) CSAKVAR, Hungary — Under Communism, farmers labored in the fields that stretch for miles around this town west of Budapest, reaping wheat and corn for a government that had stolen their land.

Today, their children toil for new overlords, a group of oligarchs and political patrons who have annexed the land through opaque deals with the Hungarian government. They have created a modern twist on a feudal system, giving jobs and aid to the compliant, and punishing the mutinous.

These land barons, as it turns out, are financed and emboldened by the European Union.

Every year, the 28-country bloc pays out $65 billion in farm subsidies intended to support farmers around the Continent and keep rural communities alive. But across Hungary and much of Central and Eastern Europe, the bulk goes to a connected and powerful few. The prime minister of the Czech Republic collected tens of millions of dollars in subsidies just last year. Subsidies have underwritten Mafia-style land grabs in Slovakia and Bulgaria.

Europe’s farm program, a system that was instrumental in forming the European Union, is now being exploited by the same antidemocratic forces that threaten the bloc from within. This is because governments in Central and Eastern Europe, several led by populists, have wide latitude in how the subsidies, funded by taxpayers across Europe, are distributed — even as the entire system is shrouded in secrecy.

For the full story, see:

Selam Gebrekidan, Matt Apuzzo and Benjamin Novak. “Populist Regimes Siphon Millions in E.U. Farm Aid.” The New York Times, First Section (Sunday, November 3, 2019): 1 & 12.

(Note: the online version of the story has the same date as the print version, and has the title “The Money Farmers: How Oligarchs and Populists Milk the E.U. for Millions.” The online version says that the title of the New York print edition was “Populist Politicians Exploit E.U. Aid, Reaping Millions.” The title of my National edition was “Populist Regimes Siphon Millions in E.U. Farm Aid.”)

Muyembe Had Knowledge of an Ebola Cure Before Clinical Trial

(p. A1) In a medical breakthrough that compares to the use of penicillin for war wounds, two new drugs are saving lives from the virus and helping uncover tools against other deadly infectious diseases. They were proven effective in a gold-standard clinical trial conducted by an international coalition of doctors and researchers in the middle of armed violence.

. . .

(p. A10) Dr. Muyembe set out on his path to an Ebola treatment during the 1995 outbreak. He transferred blood from five survivors to eight patients, hoping that the antibodies that kept some people alive would keep others from dying. Seven of the patients who received the blood transfusion recovered.

He published the results in a scientific journal in 1999. Other researchers said the study was small and had failed to include a control group, a comparison set of patients who weren’t given the treatment, to fully test its efficacy.

For the full story, see:

Betsy McKay. “From a War Zone Came an Unexpected Cure for Ebola.” The Wall Street Journal (Thursday, October 31, 2019): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date Oct. 30, 2019, and has the title “‘Ebola Is Now a Disease We Can Treat.’ How a Cure Emerged From a War Zone.”)

“Proud” Entrepreneurs’ “Joy Was Palpable”

(p. A13) People of all backgrounds are starting to see how they can participate in our wonderful free-market system. They’re innovating, creating jobs and lifting themselves and others up.

I was fortunate to come to that same realization as a young man. Although I had always aspired to be financially successful, my role models in Nebraska City, Neb., of the 1940s and ’50s were mainly doctors, dentists and attorneys in town. There was nothing to point me toward founding a discount brokerage firm, as I ultimately did with Ameritrade. Luckily, on my father’s advice, I took a job as a credit reporter for Dun & Bradstreet.

It wasn’t a high-paying or respected job, but it meant I spent my days driving from business to business in Nebraska and Iowa, interviewing entrepreneurs about their balance sheets. Those business owners shared proud stories of how they built their companies. Their joy was palpable. Had I not received that education in the field, I might never have become an entrepreneur.

For the full commentary, see:

Joe Ricketts. “In Praise of Today’s Entrepreneurs.” The Wall Street Journal (Tuesday, November 5, 2019): A13.

(Note: the online version of the commentary has the date Nov. 10, 2019, and has the title “Big Business Is Overcharging You $5,000 a Year.”)

Ricketts’s commentary is related to his book:

Ricketts, Joe. The Harder You Work, the Luckier You Get: An Entrepreneur’s Memoir. New York, NY: Simon & Schuster, 2019.