Month: October 2021

A Firm Does Not Need to Be a Platform to Matter

(p. 17) Over the past two decades, the world’s hyper-ambitious entrepreneurs — is there now any other kind? — have largely pursued a pair of goals in tandem. First: Become a platform. Second: Take over the world. The former is supposed to lead to the latter, as it seemingly has for the five companies conglomerated under the intimidating acronym FAANG. Facebook, Apple, Amazon, Netflix and Google have taken such a bloodsucking bite (get it?) out of the world economy that in the past half decade alone they have more than tripled in value — at a rate three times faster than the growth of the entire S&P 500 — and are now worth north of $7 trillion. The appeal of building a platform is clear.

. . .

The word “platform” has been deployed so many times in so many ways that it has lost almost all meaning, a fact that Jonathan Knee, who teaches at Columbia University’s business school, tries to spell out in his new book, “The Platform Delusion.”

. . .

Knee’s book is filled with business school case studies that might be a bit in the weeds for general readers. (One of the successes he identifies is a company that makes software for a very specific financial accounting function.) But for aspiring entrepreneurs these stories offer a primer on the delusion Knee has identified, and show how to avoid the two primary misjudgments that cause it. The first is a belief that platforms emerged with the dawn of the internet. In fact, they’ve been around for decades.

. . .

But the crux of Knee’s argument is that “beyond their size and success” — no small feat — there is little the big platforms have in common.

. . .

Knee grants that the breadth and scope of the giant tech platforms is “awe-inspiring,” but he thinks our collective fear of them is overblown. (. . . ) The platforms have weaknesses just like any business, he argues, and the succubi themselves push the myth of their own invincibility in order to dissuade any potential competition.

But what the myth has mostly done is tempt young entrepreneurs to try to match them.

. . .

Knee believes that investors, and many of his students, are fooling themselves into thinking that building a globe-spanning platform is a viable goal. Platforms are successful not because they are platforms, but because they exploit the same kinds of advantages that successful businesses have enjoyed for decades. It’s a boring realization, but one that Knee hopes will save his students not only from pursuing bad ideas, but from ruining their lives. The platform siren song, he writes, “fatally impedes the ability of many to clearly consider what they might actually enjoy.” Not everyone needs to start a company to be happy. And not every company needs to take over the world.

For the full review, see:

Reeves Wiedeman. “Nosedive.” The New York Times Book Review (Sunday, September 26, 2021): 17.

(Note: ellipses added.)

(Note: the online version of the review has the date Sept. 15, 2021, and has the title “Why Does Every Company Now Want to Be a Platform?”)

The book under review is:

Knee, Jonathan A. The Platform Delusion: Who Wins and Who Loses in the Age of Tech Titans. New York: Portfolio, 2021.

Human Footprints from 23,000 Years Ago Found in New Mexico

(p. A3) At the height of the last Ice Age, generations of children and teenagers ambled barefoot along a muddy lakefront in what is now New Mexico, crossing paths with mammoths, giant ground sloths and an extinct canine species known as dire wolves.

Now, some 23,000 years later, the young people’s fossilized footprints are yielding new insights into when humans first populated the Americas. Unearthed in White Sands National Park by a research team that began its work in 2016, the tracks are about 10,000 years older and about 1,600 miles farther south than any other human footprints known in America, scientists reported Thursday in the journal Science.

“It is, in my view, the first unequivocal evidence of human presence in the Americas” during the last Ice Age, Daniel Odess, chief of science and research at the U.S. National Park Service and a senior author of the report, said of the discovery. “The footprints are inarguably human.”

. . .

In earlier work published in 2018, the scientists described an undated set of fossilized human tracks at the White Sands site that they believe were made by people stalking a giant sloth. The tracks overlapped those of the sloth, suggesting a pursuit.

“We will never see humans interacting with giant sloths, but the footprints are telling us the sloths were scared of humans and the humans were confident,” said Sally Reynolds, a paleontologist at Bournemouth and a member of the research team.

The scientists also uncovered what they believe to be the footprints of a prehistoric woman who traveled for almost a mile with a toddler, sometimes carrying the child and sometimes making the young one walk by her side. It is the longest fossilized human trackway ever discovered, according to their research, which was published in 2018 in the journal Quaternary Science Reviews.

For the full story, see:

Robert Lee Hotz. “Footprints Offer Clues About Earliest Americans.” The Wall Street Journal (Monday, Sept. 24, 2021): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date September 23, 2021, and has the title “Footprints Yield New Clues About the First Americans.” The last paragraph quoted above appears in the online, but not the print, version.)

Public Transit Subsidies Reduce Incentives to Innovate

(p. A4) The bipartisan infrastructure bill approved by the Senate this month is the latest effort to inject federal money into public transit agencies. But all that money likely won’t buy what transit really needs: more riders.

Unless ridership recovers from its pandemic-induced drop, agencies will again confront large budget deficits once the federal money runs out in three or four years, analysts say. That could mean service cuts and fare increases, according to transit agencies.

“As soon as the money stops flowing, transit agencies are going to be in the same position as they were before,” said Baruch Feigenbaum, a transportation policy expert at the libertarian-leaning Reason Foundation.

New York’s Metropolitan Transportation Authority, for instance, expects to use up its $14.5 billion allocation of federal aid by 2024, at which point it will face a $3.5 billion two-year shortfall.

. . .

Some experts say agencies’ financial struggles during the pandemic should prompt Congress to help fund agencies’ day-to-day costs.

. . .

Other analysts, however, say agencies need to find ways to adapt instead of living off federal subsidies.

“The problem with free money is it does not encourage innovation, and that’s really what transit agencies need to be encouraged to do right now,” said the Reason Foundation’s Mr. Feigenbaum. “It’s just postponing the reckoning.”

For the full story, see:

David Harrison. “Public Transit Is Flush With Cash, But Not Riders.” The Wall Street Journal (Monday, Aug. 23, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story has the date August 22, 2021, and has the title “Transit Got Billions in Relief From Congress but Still Faces Deficits.”)

Chinese Proletariat Yells: “Evergrande, Give Back My Money I Earned With Blood and Sweat!”

(p. B1) When the troubled Chinese property giant Evergrande was starved for cash earlier this year, it turned to its own employees with a strong-arm pitch: Those who wanted to keep their bonuses would have to give Evergrande a short-term loan.

Some workers tapped their friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments.

Now, hundreds of employees have joined panicked home buyers in demanding their money back from Evergrande, gathering outside the company’s offices across China to protest last week.

Once China’s most prolific property developer, Evergrande has become the country’s most in-(p. B7)debted company. It owes money to lenders, suppliers and foreign investors. It owes unfinished apartments to home buyers and has racked up more than $300 billion in unpaid bills. Evergrande faces lawsuits from creditors and has seen its shares lose more than 80 percent of their value this year.

Regulators fear that the collapse of a company Evergrande’s size would send tremors through the entire Chinese financial system. Yet so far, Beijing has not stepped in with a bailout, having promised to teach debt-saddled corporate giants a lesson.

. . .

As rumors rippled through the Chinese internet that Evergrande might go bankrupt this month, Mr. Jin and some of his colleagues gathered in front of provincial government offices to pressure the authorities to step in.

In the southern city of Shenzhen, home buyers and employees crowded into the lobby of Evergrande’s headquarters last week and shouted for their money back. “Evergrande, give back my money I earned with blood and sweat!” some could be heard yelling in video footage.

For the full story, see:

Alexandra Stevenson and Cao Li. “Workers Had To Lend Cash To China Firm.” The New York Times (Saturday, September 20, 2021): B1 & B7.

(Note: ellipsis added.)

(Note: the online version of the story was updated Sept. 22, 2021, and has the title “Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus.”)

Precise Decisions Can Be Fairer (But Can You Be Precisely Wrong?)

There’s a famous quote, usually wrongly attributed to Keynes that ‘it’s better to be vaguely right than precisely wrong.’ In a new book “noise” refers to inconsistent decisions, that need not be biased in any consistent way. But consistency is not the only value that matters. Academics are sometimes evaluated on the basis of the number of articles they publish. If this is done conscientiously, then the evaluation is consistent, and in that sense “fair.” But maybe there are other criteria that are harder to measure, but that matter more, like the profundity and insight of what is published. Evaluating on the basis of well-measured criteria, that matter less, rather than poorly-measured criteria, that matter more, may increase unfairness in a deeper sense.

(p. 10) A study at an oncology center found that the diagnostic accuracy of melanomas was only 64 percent, meaning that doctors misdiagnosed melanomas in one of every three lesions.

When two psychiatrists conducted independent reviews of 426 patients in state hospitals, they came to the equivalent of a tossup: agreement 50 percent of the time on what kind of mental illness was present.

. . .

Doctors are more likely to order cancer screenings for patients they see early in the morning than late in the afternoon.

. . .

In a study of the effectiveness of putting calorie counts on menu items, consumers were more likely to make lower-calorie choices if the labels were placed to the left of the food item rather than the right.

“When calories are on the left, consumers receive that information first and evidently think ‘a lot of calories!’ or ‘not so many calories!’ before they see the item,” Daniel Kahneman, Olivier Sibony and Cass R. Sunstein explain in this tour de force of scholarship and clear writing. “By contrast, when people see the food item first, they apparently think ‘delicious!’ or ‘not so great!’ before they see the calorie label. Here again, their initial reaction greatly affects their choices.” This hypothesis is supported, the authors write in a typically clever aside, by the “finding that for Hebrew speakers, who read right to left, the calorie label has a significantly larger impact if it is on the right rather than the left.”

These inconsistencies are all about noise, which Kahneman, Sibony and Sunstein define as “unwanted variability in judgments.”

. . .

As the authors explain in their introduction, a team of target shooters whose shots always fall to the right of the bull’s-eye is exhibiting a bias, as is a judge who always sentences Black people more harshly. That’s bad, but at least they are consistent, which means the biases can be identified and corrected. But another team whose shots are scattered in different directions away from the target is shooting noisily, and that’s harder to correct. A third team whose shots all go to the left of the bull’s-eye but are scattered high and low is both biased and noisy.

Despite its prominence in so many realms of human judgment, the authors note that “noise is rarely recognized,” let alone counteracted. Which is why the parade of noise examples that the authors provide are so compelling, and why gathering the examples in one place to demonstrate the cost of noise and then suggesting noise reduction techniques, or “decision hygiene,” makes this book so important. We are living in a moment of rampant polarization and distrust in the fundamental institutions that underpin civil society. Eradicating the noise that leads to random, unfair decisions will help us regain trust in one another.

“Noise” seems certain to make a mark by calling attention to the problem and providing a tangible guide to reducing it. Despite the authors’ intimidating academic credentials, they take pains to explain, even with welcome redundancy, their various categories of noise, the experiments and formulas that they introduce, as well as their conclusions and solutions.

For the full review, see:

Steven Brill. “No Chance.” The New York Times Book Review (Sunday, May 30, 2021): 10.

(Note: ellipses added.)

(Note: the online version of the review has the date May 18, 2021, and has the title “For a Fairer World, It’s Necessary First to Cut Through the ‘Noise’.”)

The book under review is:

Kahneman, Daniel, Olivier Sibony, and Cass R. Sunstein. Noise: A Flaw in Human Judgment. New York: Little, Brown Spark, 2021.

Nazi Regime Was “Really Bad at Industrial Production”

(p. A6) The failure of Nazi Germany’s nuclear program is well established in the historical record.

. . .

In their quest to produce an atomic bomb, the Germans wanted to use a method in which uranium is submerged in heavy water, Professor Brown said. But the Allies dealt those plans “a big blow” when they bombed a plant in Norway that was the only place the Germans could get the key ingredient, she added.

Additionally, to succeed in its efforts, Nazi Germany would have needed large factories to produce bombs, vast tracts of land to test them and security from the threat of aerial attacks so that enemies could not spy on them, Professor Brown said.

Adam Seipp, a history professor at Texas A&M University, said Nazi Germany lacked the resources because it was “really bad at industrial production.”

“It’s one of the reasons they lost the war so catastrophically,” he said.

For the full story, see:

Jesus Jiménez. “New Podcasts Add to the Conversation in Cuba.” The New York Times, First Section (Sunday, September 12, 2021): A6.

(Note: ellipsis added.)

(Note: the online version of the story was updated Sept. 11, 2021, and has the title “Could Nazis Have Built Bomb? Lab Tracks a Clue.” The sentence starting with “Additionally” appears in the online, but not the print, version of the article.)

French Regulators Ban Hardy Grapes that Thrive in Global Warming

(p. A4) BEAUMONT, France — The vines were once demonized for causing madness and blindness, and had been banned decades ago. The French authorities, brandishing money and sanctions, nearly wiped them out.

But there they were. On a hillside off a winding mountain road in a lost corner of southern France, the forbidden crop was thriving. Early one recent evening, Hervé Garnier inspected his field with relief.

In a year when an April frost and disease have decimated France’s overall wine production, Mr. Garnier’s grapes — an American hybrid variety named jacquez, banned by the French government since 1934 — were already turning red. Barring an early-autumn cold snap, all was on track for a new vintage.

“There’s really no reason for its prohibition,” Mr. Garnier said. “Prohibited? I’d like to understand why, especially when you see the prohibition rests on nothing.”

Mr. Garnier is one of the last stragglers in a long-running struggle against the French wine establishment and its allies in Paris. The French government has tried to rip the jacquez and five other American vine varieties out of French soil for the past 87 years, arguing that they are bad for human physical and mental health — and produce bad wine.

But in recent years, the hardiness of the American varieties has given a lift to guerrilla winemakers like him, as climate change wreaks havoc on vineyards across Europe and natural wines made without the use of pesticides have grown in popularity.

. . .

With France awash in wine, lawmakers urgently addressed the problem around Christmas in 1934. To reduce overproduction, they outlawed the six American vines — including hybrids like the jacquez and pure American grapes like the isabelle — mainly on the grounds that they produced poor wine. Production for private consumption would be tolerated, but not for commercial sale.

The government had planned to follow up with bans on other hybrids but stopped because of the backlash to the initial ban, Mr. Lacombe said. Then the war provided another reprieve.

It was only in the 1950s — when hybrids were still cultivated on a third of all French vineyards — that the government really began cracking down on the six forbidden grapes, Mr. Lacombe said. It offered incentives to rip out the offending vines, then threatened growers with fines.

It then condemned the American grapes as harmful to body and sanity with arguments “not completely honest to try to quell a situation that was slipping away from the government,” Mr. Lacombe said.

“In fact, the present defenders of these vines are right in underlining all the historical and government inconsistencies,” he added.

. . .

Originally from northeastern France, Mr. Garnier, now 68, was once a longhaired high school student who traveled to see Jimi Hendrix, The Who and Janis Joplin perform in concert.

. . .

Some years later, he got into winemaking almost by accident. Two elderly brothers asked him to harvest their jacquez grapes in return for half of the wine production. He learned the history of the forbidden vines and eventually bought the brothers’ vineyards.

Today, he makes 3,400 bottles a year of his deeply colored, fruity “Cuvée des vignes d’antan,” or wine from vines of yesteryear. He got around the ban by creating a cultural, noncommercial association, “Memory of the Vine.” A membership fee of 10 euros, or about $12, yields a bottle.

With the growing threat of climate change and the backlash against the use of pesticides, Mr. Garnier is hoping that the forbidden grapes will be legalized and that France’s wine industry will open up to a new generation of hybrids — as Germany, Switzerland and other European nations already have.

“France is a great wine country,” he said. “To remain one, we have to open up. We can’t get stuck on what we already know.”

For the full story, see:

Norimitsu Onishi. “Guerrilla Winemakers Want France to Yield.” The New York Times (Monday, August 30, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story was updated Sept. 16, 2021, and has the title “For France, American Vines Still Mean Sour Grapes.”)

Cuban Podcasts Thrive Because Cheap to Produce and Hard for Communists to Censure

(p. 4) There has been little to laugh about in Cuba lately. But on a recent episode of El Enjambre, a weekly podcast produced on the island, the three hosts were howling at the latest form of censorship by the state-run telecommunications company.

“If you send a text message with the word freedom, the message doesn’t reach the recipient,” Lucía March told her incredulous co-hosts, referring to the Spanish language word libertad. “It evaporates, vanishes! I’m serious.”

The exchange was funny, informative and lighthearted, traits that have made El Enjambre one of the biggest hits among the scores of new Cuban-made podcasts that are now competing for residents’ attention and limited internet bandwidth.

Cubans began having access to the internet on smartphones only in 2018. Since then, podcasts about politics, current events, history, entrepreneurship and language have upended how Cubans get their information, expanding the middle ground between the hyperpartisan content generated by government-run media outlets and American government funded newsrooms that are highly critical of the island’s authoritarian leaders.

. . .

“It’s very difficult for a government to censor a podcast because there are many ways of distributing it,” said Mr. Lugones, who believes the new audio initiatives are stirring nuanced conversations on the island. “Podcasts spark debates in society all the time. They cause people to reflect.”

A desire to do just that prompted Camilo Condis, an industrial engineer who has opened a few restaurants in Havana, to launch El Enjambre — Spanish for swarm of bees — in late 2019. The heart of the show is a spirited, spontaneous conversation among Mr. Condis and his co-hosts, Ms. March and Yunior García Aguilera.

No subject is off limits.

El Enjambre provided detailed coverage of the remarkable July 11 anti-government protests in Cuba and searing criticism of the ruthless crackdown that followed.

The hosts also dissected the dismal state of the health care system as Covid-19 cases surged on the island, mocked the sputtering initiatives by the government to allow some private sector activities, such as garage sales, and attempted to read the tea leaves on the future of Washington’s relationship with Havana.

Each episode includes a short, humorous, scripted drama, a segment called History without Hysteria and a lengthy conversation that tends to focus on the issues Cubans have been arguing about on social media over the past few days.

“The objective was to create a conversation like you’d have on any street corner in Cuba,” Mr. Condis said. “But we provide only verified facts, because it matters greatly to us to never provide false information.”

. . .

But the format is the rare media venture that requires little training or capital, said Elaine Díaz, the founder of Periodismo de Barrio, a watchdog news site that covers environmental and human rights issues in Cuba.

. . .

Podcasts in Cuba are labors of love at this point, said Mr. Condis. But he hopes that one day they can become profitable.

“In the future, I want to have advertisers,” he said.

For the full story, see:

Ernesto Londoño. “New Podcasts Add to the Conversation in Cuba.” The New York Times, First Section (Sunday, September 19, 2021): 4.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 18, 2021, and has the title “Despite Censorship and Poor Internet, Cuban Podcasts Are Booming.”)

Chinese Communist Party Has “Instinct” for “Repression and Control”

(p. B1) To build a logistics hub next to Beijing’s main airport, Desmond Shum spent three years collecting 150 official seals from the many-layered Chinese bureaucracy.

To get these seals of approval, he curried favors with government officials. The airport customs chief, for example, demanded that he build the agency a new office building with indoor basketball and badminton courts, a 200-seat theater and a karaoke bar.

“If you don’t give this to us,” the chief told Mr. Shum with a big grin over dinner, “we’re not going to let you build.”

Mr. Shum recounts the conversation in a memoir that shows how the Communist Party keeps business in line — and what happens when businesspeople overstep. Released this month, “Red Roulette: An Insider’s Story of Wealth, Power, Corruption and Vengeance in Today’s China” shows how government officials keep the rules fuzzy and the threat of a crackdown ever-present, . . .

. . .

(p. B4) . . . Mr. Shum’s book has come out just as the future of China’s entrepreneurs is in doubt. The government has cracked down on the most successful private enterprises, including Alibaba Group, the e-commerce giant, and Didi, the ride-hailing company. It has sentenced business leaders who dared to criticize the government to lengthy prison terms.

. . .

“The party has an almost animal instinct toward repression and control,” Mr. Shum wrote in the book. “It’s one of the foundational tenets of a Leninist system. Anytime the party can afford to swing toward repression, it will.”

. . .

“Only in times of crisis does the party loosen its grip, allowing more free enterprise and more freedom,” Mr. Shum wrote. “China’s growing economy presented the party with an opportunity to reassert its dominance.”

. . .

Many businesspeople have managed to move at least part of their assets abroad, he said. Few make long-term investments because they are too risky and difficult. “Only idiots plan for the long term,” he said.

. . .

To win a green light for the airport logistics hub, Mr. Shum dined with officials nearly every day for a few years, downing one bottle of Moutai, the famed Chinese liquor, at each meal. His employees brought officials fine teas, ran their errands and looked after the needs of their wives and children.

One employee accompanied so many people to so many sauna trips that his skin started peeling off, he wrote.

The top airport and local district officials changed three times during the project’s span. Each time, Mr. Shum’s team had to restart the ingratiating process.

For the full commentary, see:

Li Yuan. “An Insider To Money And Power In China Tells All.” The New York Times (Friday, Sept. 24, 2021): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the commentary has the same date as the print version, and has the title “An Insider Details the ‘Black Box’ of Money and Power in China.”)

The book discussed in the commentary quoted above is:

Shum, Desmond. Red Roulette: An Insider’s Story of Wealth, Power, Corruption, and Vengeance in Today’s China. New York: Scribner, 2021.