Author: Art Diamond

When Does Selling an Entrepreneurial Vision Cross a Legal or Ethical Line?

(p. B4) I’m angry about start-up founders who over-promise, behave badly and sometimes crater their companies and walk away unscathed.

. . .

I’ve been thinking about this recently because of the glare on two start-up founders, Adam Neumann and Trevor Milton.

. . .

A new book details the ways that WeWork mostly just rented cubicles, burned through piles of other people’s money, treated employees like garbage and made Neumann stinking rich as the company nearly collapsed in 2019. WeWork has stuck around in less outlandish form without Neumann.

And last week, federal authorities charged Milton with duping investors in his electric truck start-up Nikola into believing that the company’s battery- and hydrogen-powered vehicle technology was far more capable than it really was. Among the allegations are that Milton ordered the doctoring of a promotional video to make a Nikola prototype truck appear to be fully functional when it was not.

. . .

Disproportionate rewards go to the entrepreneurs and companies that can sell a vision of billions of users and values in the trillions of dollars.

. . .

Those conditions tempt people to skirt the edges of what’s right and legal. But I also wonder if curtailing the excesses would also curb the ambition that we want. Sometimes the zeal to imagine ridiculously grand visions of the future brings us Theranos. And sometimes it brings us Google. Are these two sides of the same coin?

For the full commentary, see:

Shira Ovide. “Why Do Hucksters Come With the Territory?” The New York Times (Monday, August 9, 2021): B4.

(Note: ellipses added.)

(Note: the online version of the commentary was updated August 4, 2021, and has the title “Innovation Invites Hucksters.”)

The book on WeWork mentioned in the above commentary is:

Brown, Eliot, and Maureen Farrell. The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion. New York: Crown, 2021.

Facebook and Twitter Colluded with Government to Censor Free Speech

(p. A17) The media has panned Donald Trump’s First Amendment lawsuits against Facebook, Twitter and YouTube: “sure to fail,” “as stupid as you’d think,” “ridiculous.”

. . .

But the central claim in Mr. Trump’s class-action lawsuit—that the defendants should be treated as state actors and are bound by the First Amendment when they engage in selective political censorship—has precedent to back it up. Their censorship constitutes state action because the government granted them immunity from legal liability, threatened to punish them if they allow disfavored speech, and colluded with them in choosing targets for censorship.

. . .

A growing body of evidence suggests that social media companies have voluntarily worked with Democratic officials to censor content the latter disfavor. In Brentwood Academy v. Tennessee Secondary School Athletic Association (2001), the high court held that state action exists if the private party’s conduct results from “significant encouragement, either overt or covert,” or if the private party is a “willful participant in joint activity with the State or its agents.”

According to allegations in other pending lawsuits, Twitter formed “trusted partner” relationships with state officials to remove content identified by the officials as election misinformation—when in reality the content was simply critical of state policies.

In September 2020 Mr. Zuckerberg acknowledged that Facebook “works with” the Centers for Disease Control and Prevention to remove Covid-related content. The company’s official policy states that it is “advised” by public-health authorities about what Covid content should be blocked. For months, while officials including Anthony Fauci proclaimed that the Wuhan lab-leak theory was “debunked” and a “conspiracy theory,” Facebook blocked any mention of that theory as “misinformation.”

But after Dr. Fauci and the administration retreated from this position, Facebook almost immediately lifted its ban. Recently published email exchanges between Mr. Zuckerberg and Dr. Fauci reveal no evidence of direct instruction from the government on this point but make a case for Facebook’s willful participation in a joint activity with the government.

For the full commentary, see:

Vivek Ramaswamy. “Trump Can Win His Case Against Tech Giants.” The Wall Street Journal (Monday, July 12, 2021): A17.

(Note: ellipses added; italics in original.)

(Note: the online version of the commentary has the date July 11, 2021, and has the same title as the print version.)

Water Cooler Encounters May Help More on Less-Developed Projects than Mature Projects

(p. 1) A key scientific breakthrough that would eventually help protect millions from Covid-19 began with a chance meeting at a photocopier — in 1997, between Professor Katalin Kariko and Dr. Drew Weissman, whose work laid the foundation for the Pfizer and Moderna vaccines.

It’s exactly the type of story that has executives itching to get people back to offices. Chance meetings like this are essential for innovation, the theory goes. “Remote work virtually eliminates spontaneous learning and creativity because you don’t run into people at the coffee machine,” Jamie Dimon, the chief executive of JPMorgan Chase, recently told shareholders.

Creativity is hard to quantify. But research, including studies of companies working remotely during the pandemic, supports Mr. Dimon’s argument only up to a point. The data shows that in-office work is helpful at one part of the creative process: forming initial relationships, particularly with people outside your normal sphere.

. . .

(p. 5) A new analysis of announcements by the 50 largest public video game companies, by Ben Waber and Zanele Munyikwa, found that companies that moved to remote work during the pandemic had more delays in new products than before the pandemic, while those that worked in person did not.

The researchers have a hypothesis about why. They also tracked billions of communications — email, chat and calendar data — among information employees at a dozen large global companies over recent years. They found that while working remotely, individual workers were more productive than before, and communicated more with people at different levels of the company and with close colleagues. But they communicated 21 percent less with their weak ties. Perhaps the video game developers lost the benefit of asking a co-worker from a different department to test a prototype, for example, or of running into someone from marketing and brainstorming ideas for selling a new game.

“I do think eventually technology will help here, but the stuff that’s widely available today just doesn’t do it,” said Mr. Waber, co-founder of Humanyze, a workplace analytics company started at M.I.T. Media Lab, where he got a Ph.D. “It probably would be fine if those initial water cooler conversations happened remotely. It’s just less likely they would.”

. . .

Another study, using location tracking technology to follow scientists and engineers at a global manufacturing firm, found that people who often walked by one another in the office, like on their way to the printer or the restroom, were significantly more likely to end up collaborating, especially at the beginning of projects.

“For most collaboration, takeoff is the most challenging bit, and that’s when we find co-location is most helpful,” said Felichism W. Kabo, a research scientist at the University of Michigan and the study’s author. “When people have a prior relationship, it’s much easier to sustain that virtually.”

. . .

For Professor Kariko, there was a long period when it seemed that her research on messenger RNA would never get funding. It was so different from that of her close colleagues, she has said, that it had little support. It took that encounter at the copy machine — meeting Dr. Weissman, who brought a different perspective and a desire to make a vaccine — to change that.

For the full commentary, see:

Claire Cain Miller. “Is the Water Cooler a Font of Inspiration?” The New York Times, SundayBusiness Section (Sunday, September 5, 2021): 1 & 5.

(Note: ellipses added.)

(Note: the online version of the commentary was updated Sept. 4, 2021, and has the title “When Chance Encounters at the Water Cooler Are Most Useful.”)

The article by Waber and Munyikwa mentioned above is:

Waber, Ben, and Zanele Munyikwa. “Did Wfh Hurt the Video Game Industry?” Harvard Business Review (2021).

The article by Kabo mentioned above is:

Kabo, Felichism W. “A Model of Potential Encounters in the Workplace: The Relationships of Homophily, Spatial Distance, Organizational Structure, and Perceived Networks.” Environment and Behavior 49, no. 6 (2017): 638–62.

Global Warming Makes This “An Exciting Time if You’re a Wine Lover”

(p. B6) . . . rising temperatures have had . . . unforeseen effects. Parts of the United Kingdom, a country not at all known for wine production, are now making sparkling wine — as they did back in Roman times.

For wine connoisseurs, that means changes in the types of wines they’ve long loved and where those wines are produced. The average consumer may not notice but the seemingly stable world of wine has become anything but.

“We’re seeing a broader selection of very interesting wines because of this warming,” said Dave Parker, founder and chief executive of the Benchmark Wine Group, a large retailer of vintage wines. “We’re seeing regions that historically were not that highly thought of now producing some excellent wines. The U.K., Oregon, New Zealand or Austria may have been marginal before but they’re producing great wines now. It’s kind of an exciting time if you’re a wine lover.”

The rising temperatures have certainly hurt some winemakers, but in some wine-growing areas the heat has been a boon for vineyards and the drinkers who covet their wine. Mr. Parker said growing conditions for sought-after vintages in Bordeaux used to come less frequently and sometimes only once every decade: 1945, 1947, 1961, 1982, 1996 and 2000. They were all very ripe vintages, because of the heat. But in the last decade, with temperatures rising in Bordeaux, wines from 2012, 2015, 2016, 2018, and 2019 are all sought after — and highly priced.

And then, there are the wines from previously overlooked regions.

“What I’d say is, currently, there hasn’t been a better time for wine collectors,” said Axel Heinz, the estate director of Ornellaia and Masseto, two of Italy’s premier wines. “The vintages and wine have become so much better. And for us, the changes over the past 20 years have put a focus on many growing regions that collectors weren’t interested in before, like Italian and Spanish wine.”

For the full story, see:

Paul Sullivan. “Climate Change’s Impact by the Bottle.” The Wall Street Journal (Saturday, September 4, 2021): B6.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 3, 2021, and has the title “Change May Be Coming to Your Favorite Wines.”)

20 Startups Are Developing Senolytics to Slow Cell Senescence

(p. A17) Some species of tortoises, . . ., have a risk of death that doesn’t seem to change with age in adulthood. Though these wrinkly, lumbering beasts might not seem like ideal ambassadors for aging well, by the statistical definition of aging—how fast your risk of death increases with time—these tortoises hardly age at all.

. . .

A secret of the tortoises’ longevity is that their cells can divide more than twice as many times as human cells before becoming aged or “senescent.”

. . .

Already, therapies to combat cell senescence—senolytics—are undergoing human trials. Senescent cells build up in our bodies as we get older and seem to accelerate the aging process as they accumulate. Drugs and genetic modifications that periodically remove them have been shown to make mice biologically younger: They live longer and healthier than untreated mice, with stronger muscles and hearts; delayed cancer, cataracts and cognitive decline; and even plumper skin and thicker, glossier fur.

There are currently at least 20 startups trying to transfer senolytics from the lab to the clinic. These efforts target specific diseases in which senescent cells are known to be key villains. A company called Unity Biotechnology is targeting these cells to combat age-related sight loss, while a team including scientists at the Mayo Clinic who first demonstrated senolytics in mice is working to use the same drug cocktail to treat age-related lung fibrosis.

The average 80-year-old is suffering from five different diagnoses and taking a similar number of medications to treat them.

Senolytics are the vanguard but close behind are dozens of different ways to slow or reverse aging in the lab, ranging from drugs and diets to gene and stem cell therapies. These treatments intervene in the molecular, cellular and biological underpinnings of the aging process, from the smallest scale in our biology (damage to DNA and protein molecules) to the largest (dysfunction across the immune system). They are aimed at slowing down multiple aspects of the process and at wide-ranging rejuvenation.

There have been some high-profile failures in the field. One was resveratrol, found in grapes and other sources. A company working on resveratrol, Sirtris, was acquired by drug giant GSK for $720 million in 2008 but closed down five years later. The path from lab bench to pill is filled with obstacles, and we can expect further setbacks, but with so many different therapies and a deeper understanding of the biology of aging, at least some of the new ideas are likely to succeed.

For the full commentary, see:

Andrew Steele. “The Best Remedy for Our Diseases? Aging Less.” The Wall Street Journal (Saturday, April 10, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary was updated April 10, 2021, and has the same title as the print version.)

Steele’s commentary, quoted above, is related to his book:

Steele, Andrew. Ageless: The New Science of Getting Older without Getting Old. New York: Doubleday, 2021.

Carolyn Shoemaker Developed Tacit Knowledge of Presence of Comets and Asteroids

(p. B6) Carolyn Shoemaker, who for more than a decade managed a telescopic camera with her husband from a high-altitude observatory in California and became widely regarded, without academic training, as the world’s foremost detector of comets and asteroids, died on Aug. 13 [2021] at a hospital in Flagstaff, Ariz.

. . .

In the afternoons, Dr. Shoemaker would take the film they had used the previous night and develop it in a darkroom, then turn over the negatives to Ms. Shoemaker. Using a stereoscope, she would compare exposures of the same block of sky at different times. If anything moved against the relatively fixed background of stars, it would appear to float in the viewing device’s eyepiece.

Ms. Shoemaker was charged with discerning what was the grain of the film (and perhaps dust on it) and what was an actual image of light emitted by an object hurtling through space. “With time,” she wrote, “I saw fainter and fainter objects.”

It took a few years before she found her first new comet, in 1983. By 1994 she had discovered, in addition to hundreds of asteroids, 32 comets, a number considered by the United States Geological Survey and others to represent the world record at the time.

. . .

One comet, known as Shoemaker-Levy 9 (named in part for their associate David Levy), had stood out from the rest. Rather than making a lonely journey through the cosmic vacuum, Shoemaker-Levy 9 was on a collision course with Jupiter.

. . .

“Carolyn Shoemaker is one of the most revered and respected astronomers in history,” Jennifer Wiseman, a senior scientist overseeing the Hubble Space Telescope, said by phone. “Her discoveries, her tenacious care in how she did her work — those things have created a legacy and a reputation that has inspired people who have come into the field after her.”

. . .

. . . scientists still depend on methods that Ms. Shoemaker perfected.

“She and her colleagues set the stage for how to identify what we would call minor bodies in our solar system, such as comets and asteroids,” Dr. Wiseman said. “We still use the technique of looking for the relatively fast transverse motions of comets and asteroids in our own solar system, as compared to the slower or more fixed position of stars.”

For the full obituary, see:

Alex Traub. “Carolyn Shoemaker, 92, a Stargazer Who Spotted Comets and Asteroids.” The New York Times (Monday, September 6, 2021): B6.

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

(Note: the online version of the obituary was updated Sept. 4, 2021, and has the title “Carolyn Shoemaker, Hunter of Comets and Asteroids, Dies at 92.”)

Business Formations During Pandemic Are “Off the Charts”

Source: Haltiwanger as reprinted in WSJ article cited below.
Source: Haltiwanger as reprinted in WSJ article cited below.

(p. A4) “Sixty or more years ago, most of us, including me, were altogether too willing to treat the economy as close to fully competitive. I now think that was a mistake,” Nobel Prize-winning economist Robert Solow said in a recent interview. “The economy has grown less competitive and the elements of monopoly power are probably very important for the distribution of income between work and wealth and ultimately across individuals.”

Douglas Holtz-Eakin, president of the American Action Forum, a conservative research group, said he is skeptical of the notion that corporate power has hurt consumers. He and other Republicans say the rise of big companies such as Walmart, Home Depot and Amazon has benefited U.S. consumers by helping to push down prices.

“I take all of this talk with a healthy dose of show me,” Mr. Holtz-Eakin said. While Republicans could likely get behind some of Mr. Biden’s proposals—such as pushing back against firms forcing workers to sign noncompete clauses or states imposing what some workers say are unnecessary licensing requirements on workers—other ideas may go too far.

Some research has found less cause for concern around business consolidation. “There are reasons to be cautious about concluding that market concentration has risen or is a meaningful problem for market competition and consumer welfare,” Nancy Rose, a professor in the economics department of the Massachusetts Institute of Technology, concluded in a 2019 examination of research on the issue, citing measurement challenges among reasons for skepticism.

. . .

With the rise of a few big companies, jobs also have become concentrated there. John Haltiwanger, a University of Maryland professor, finds that the share of U.S. jobs at young, small firms declined to 16% in 2018 from 26% in 1987. During the same period, the share of jobs in older, larger firms rose from 41% to more than half.

Mr. Haltiwanger’s research shows that the U.S. economy became less dynamic during this period, with fewer new jobs created by startup firms, less job-hopping by workers seeking out new opportunities and slower worker productivity growth.

. . .

Mr. Haltiwanger said the competition dynamics might now be changing due to the coronavirus pandemic. Tracking business identification data from the Internal Revenue Service, he spotted a surge in business formations in the second half of 2020, a trend that persisted into 2021.

“It is off the charts,” he said. “I think we discovered during the pandemic that our technological infrastructure is just phenomenal. We can do almost anything we want from anywhere. That leads to lots of market opportunities. I think there is going to be a surge of dynamism. The question is will it be transitory, or true innovation?”

For the full story, see:

Jon Hilsenrath. “Economic Competition Scrutinized.” The Wall Street Journal (Monday, July 12, 2021): A4.

(Note: ellipses added.)

(Note: the online version of the story has the date July 11, 2021, and has the title “Biden Stakes Out Position in Debate Over Power of Big Companies.”)

China Removed Gene Sequences from NIH Data Base Related to Covid-19 Origin

(p. A3) Chinese researchers directed the U.S. National Institutes of Health to delete gene sequences of early Covid-19 cases from a key scientific database, raising concerns that scientists studying the origin of the pandemic may lack access to key pieces of information.

. . .

The removal of the sequencing data is described in a new paper posted online Tuesday by Jesse Bloom, a virologist at the Fred Hutchinson Cancer Research Center in Seattle. The paper, which hasn’t been peer reviewed, says the missing data include sequences from virus samples collected in the Chinese city of Wuhan in January and February of 2020 from patients hospitalized with or suspected of having Covid-19.

. . .

. . . Dr. Bloom said their removal sows doubts about China’s transparency in the continuing investigation into the origin of the pandemic.

Some other scientists agreed.

“It makes us wonder if there are other sequences like these that have been purged,” said Vaughn S. Cooper, a University of Pittsburgh evolutionary biologist who wasn’t involved in the new paper and said he hasn’t studied the deleted sequences himself.

For the full story see:

Amy Dockser Marcus, Betsy McKay and Drew Hinshaw. “Covid-19 Gene Data Removed at NIH.” The Wall Street Journal (Thursday, June 24, 2021): A3.

(Note: ellipses added.)

(Note: the online version of the story was updated June 23, 2021, and has the title “Chinese Covid-19 Gene Data That Could Have Aided Pandemic Research Removed From NIH Database.”)

“Weak Venture Capitalists Who Kowtow to Charismatic Entrepreneurs”

(p. 11) . . . the unbelievability of the rise and fall of a company that marketed itself to investors as a tech enterprise when it actually rented work space to gig-economy freelancers and starry-eyed entrepreneurs is part of the considerable lure of “The Cult of We: WeWork, Adam Neumann, and the Great Startup Delusion,” a juicy guided tour through the highly leveraged, not-quite-rags-to-billion-dollar-parachute saga of WeWork and its co-founder Adam Neumann, a startup demagogue who aspired to be a demigod, but got hamstrung by his ego and greed.

. . .

. . ., the book saves its firepower for the cataclysmic combination of Neumann’s gift for salesmanship, addiction to fund-raising and focus on his personal wealth. We meet weak venture capitalists who kowtow to charismatic entrepreneurs as well as mutual fund directors, investment bankers and deep-pocketed benefactors like SoftBank’s Masayoshi Son who enabled Neumann.

For the full review, see:

Katherine Rosman. “Office Space.” The New York Times Book Review (Sunday, August 15, 2021): 11.

(Note: ellipses added.)

(Note: the online version of the review has the date July [sic] 18, 2021, and has the title “‘How to Explain the Rise and Fall of WeWork?”)

The book under review is:

Brown, Eliot, and Maureen Farrell. The Cult of We: Wework, Adam Neumann, and the Great Startup Delusion. New York: Crown, 2021.

“Extrapolate to Doomsday”

(p. B1) The giant tech companies with their power-hungry, football-field-size data centers are not the environmental villains they are sometimes portrayed to be on social media and elsewhere.

Shutting off your Zoom camera or throttling your Netflix service to lower-definition viewing does not yield a big saving in energy use, contrary to what some people have claimed.

Even the predicted environmental impact of Bitcoin, which does require lots of computing firepower, has been considerably exaggerated by some researchers.

Those are the conclusions of a new analysis by Jonathan Koomey and Eric Masanet, two leading scientists in the field of technology, energy use and the environment. Mr. Koomey is now an independent analyst, and Mr. Masanet is a professor at the University of California, Santa Barbara. (Mr. Masanet receives research funding from Amazon.)

They said their analysis, published on Thursday [June 24, 2021] as a commentary article in Joule, a scientific journal, was not necessarily intended to be reassuring. Instead, they said, it is meant to inject a dose of reality into the public discussion of technology’s impact on the environment.

. . .

(p. B3) Exaggerated claims, the pair said, are often well-intentioned efforts by researchers who make what may seem like reasonable assumptions. But they are not familiar with fast-changing computer technology — processing, memory, storage and networks. In making predictions, they tend to underestimate the pace of energy-saving innovation and how the systems work.

. . .

Computer data centers are a case study. The biggest data centers, from which consumers and workers tap services and software over the internet, do consume huge amounts of electricity. These so-called cloud data centers are operated by companies including Alibaba, Amazon, Apple, Facebook, Google and Microsoft.

From 2010 to 2018, the data workloads hosted by the cloud data centers increased 2,600 percent and energy consumption increased 500 percent. But energy consumption for all data centers rose less than 10 percent.

What happened, the authors explain, was mainly a huge shift of workloads to the bigger, more efficient cloud data centers — and away from traditional computer centers, largely owned and run by non-tech companies.

In 2010, an estimated 79 percent of data center computing was done in traditional computer centers. By 2018, 89 percent of data center computing took place in cloud data centers.

“The big cloud providers displaced vastly less efficient corporate data centers,” Mr. Koomey said. “You have to look at the whole system and take substitution effects into account.”

The complexity, dynamism and unpredictability of technology development and markets, the authors say, make projecting out more than two or three years suspect. They critiqued a Bitcoin energy paper that projected out decades, based on what they said were old data and simplified assumptions — an approach Mr. Masanet called “extrapolate to Doomsday.”

For the full story, see:

Steve Lohr. “The Internet Is Eating Up Less Energy Than Expected.” The New York Times (Saturday, June 26, 2021): B1 & B3.

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

(Note: the online version of the story has the date June 24, 2021, and has the title “The Internet Eats Up Less Energy Than You Might Think.”)

The commentary summarized in the passages quoted above is:

Koomey, Jonathan, and Eric Masanet. “Does Not Compute: Avoiding Pitfalls Assessing the Internet’s Energy and Carbon Impacts.” Joule 5, no. 7 (July 21, 2021): 1625-28.

MSG Seasoning Maker Finds Lucrative Tech Use for MSG Byproducts

(p. B10) The chip shortage is adding extra flavor to a 113-year-old Japanese seasoning company.

Japan’s Ajinomoto is renowned for inventing monosodium glutamate—the controversial flavor enhancer that adds umami to dishes. But it also makes a material that goes into the central processing units of computers around the world.

Ajinomoto manufactures a type of insulation material called Ajinomoto Buildup Film, or ABF. It was once made using byproducts from MSG manufacturing but isn’t any longer. The insulation material in turn goes into a semiconductor component called ABF substrate, which connects microchips to circuit boards.

. . .

Ajinomoto expects ABF shipment volume to grow 67% over the next four fiscal years. And its customers downstream are expanding capacity to meet demand. Ajinomoto said growth this fiscal year may slow but it will pick up again once those expansion plans are realized.

Ajinomoto’s core seasoning business is a less tasty morsel, but the business has still weathered the pandemic well. Even though demand from restaurants dropped, increases in home cooking have helped profits since retail products sell at higher margins.

For the full story, see:

Jacky Wong. “Microchips Punch Up MSG Maker.” The Wall Street Journal (Friday, Aug. 20, 2021): B10.

(Note: ellipsis added.)

(Note: the online version of the story has the date August 19, 2021, and has the title “Is MSG Bad for You? Not if It Comes With a Side of Microchips.”)