Economics of Technology – Page 78

Web Expedites Labor Market for Small Projects

“Liz Langer helped John Burks retrieve his keys.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A1) A new crop of websites and smartphone applications are allowing people to farm out chores to a growing army of temporary personal assistants. These micro-employees are taking the division of labor to once-unthinkable extremes.
. . .
(p. A14) Some investors see dollar signs. Zaarly Inc., an online marketplace for micro-labor and goods based in San Francisco, recently raised $14.1 million from Google Inc. GOOG -2.18% investor and venture-capital firm Kleiner Perkins Caufield & Byers. Actor Ashton Kutcher and clothing designer Marc Ecko have also put in money. In October, Hewlett-Packard Chief Executive Meg Whitman joined the company’s board.
After launching six months ago, Zaarly is processing more than 1,000 transactions a week for jobs that cost around $50 a pop. Chief Executive and cofounder Bo Fishback, 33, says about half the requests involve tangible goods, and the rest involve some sort of service. One of his favorites: a person who hired someone to buy a Michael Jackson-themed dog costume for a puppy.
Sometimes the situation can be dire. John Burks, a 30-year-old actor who also runs an arts organization in Chicago, accidentally dropped his keys in a sewer during a rainstorm over the summer. To replace all the keys–including ones to his home, office and Mercedes–could cost well over $100.
After Googling “lost keys down sewer” to see what tactics others had used, Mr. Burks thought he could recover his keys with a fishing rod and a magnet, but had neither. His girlfriend at the time knew someone who worked at Zaarly, so he posted the job on its site. Liz Langer, a 27-year-old neuroscience graduate student and top Zaarly “fulfiller,” spotted the job and within an hour arrived with the needed tools. Fifteen minutes later, they fished the keys out of the sewer. (Price: $80.)
“It’s like stranger than fiction,” Mr. Burks says. “I thought there was a very small chance that anything like that can happen.”

For the full story, see:
EMILY GLAZER. “Serfing the Web: Sites Let People Farm Out Their Chores; Workers Choose Jobs, Negotiate Wages; Mr. Kutcher, Anonymously, Asks for Coffee.” The Wall Street Journal (Mon., November 28, 2011): A1 & A14.
(Note: ellipsis added.)

“Why Would I Ever Need 10 Floppy Disks?”

Steven Johnson’s early The Ghost Map is a wondrous story of a courageous medical entrepreneur who fairly single-handedly changes accepted wisdom on a hugely important issue (what causes disease). Steven Johnson’s recent Where Ideas Come From provides a mechanical account that attributes new ideas to the inevitable exploration of “the adjacent possible,” leaving little room for the great innovative entrepreneur.
It takes guts to contradict one’s most recent book, and to contradict it so eloquently. So please join me in welcoming back the Steven Johnson of The Ghost Map:

(p. C3) In the fall of 1986, during the first week of my freshman year of college, my cousin took me to the university computer store to help me buy my first Macintosh. The Mac platform was two years old at that point, and Apple had just released a new machine called the Mac Plus that featured a then-staggering 1 megabyte of RAM. (In today’s mileage, that would be just enough memory to store the first few verses of a Katy Perry song.) But the Mac did not yet offer a hard drive, and so my more tech-savvy cousin told me to buy a 10-pack of floppy disks as well.

I looked at him with astonishment. I was an art kid, not a techie. I needed a computer to write plays and short stories and term papers. The computer was just a tool, nothing more. “Why would I ever need 10 floppy disks?” I asked. “I just need one disk for my Microsoft Word files.” My cousin smiled, knowing full well where I was headed. “Just buy the disks. Trust me.”
He was right, of course, and to this day whenever I call him up to tell him about my latest computer purchase, with its terabytes of storage and gigabytes of memory, he laughs and says, “Just one disk. That’s all I need.”
. . .
The genius of famous innovators and CEOs is often exaggerated: Most fortunes are built on good fortune as much as sheer brilliance, and invention is a collaborative art. But there is no contesting the fact of Steve Jobs’s genius–just a debate about its defining qualities.
I worry that we miss something in hailing him as either a master salesman or a master designer, though he is clearly both. His real gift, from an early age, has been the ability to see that these two worlds could, and should, productively collide. It isn’t just that he made computers cool or put them in pretty boxes. It’s that he put those computers in new conceptual boxes. A machine originally designed for processing equations and building bombs turned out to have a wonderful hidden potential: for song, laughter, poetry, community, family.
. . .
When I heard the news that he was stepping down from Apple, the image that flashed in my head was of a kid in a computer store trying to save a few bucks by skimping on floppy disks. I suspect my own story is not so unusual. There is, on the one hand, the simple, factual accounting of it: Steve Jobs persuaded me to buy a lot more than 10 disks over the years. But the other hand is so much more interesting: all the wonderful, unexpected things that he got me to put on those disks.

For the full commentary, see:
STEVEN JOHNSON. “THE GENIUS OF JOBS; Marrying Tech and Art; Steven Johnson on the magic of his first Mac–and how it changed his life.” The Wall Street Journal (Sat., August 27, 2011): C3.
(Note: ellipses added.)

Steve Jobs Showed that Art and Commerce Could Be “Happy Bedfellows”

Gary Oldman. Source of photo: online version of the NYT article quoted and cited below.

(p. 2) Gary Oldman is an English actor . . . widely known for his roles as Sirius Black in the “Harry Potter” film series and Jim Gordon in the Batman movies.
. . .
READING Right now I’m reading the Steve Jobs biography by Walter Isaacson. I love when people have a singleness of purpose and don’t get dissuaded. I can connect with that. I can recognize it. I think a lot of artists have that. Art and commerce are not particularly happy bedfellows, but he was the exception.
I read quite a lot of biographies. I like nonfiction. The other book I’m carrying around with me at the moment is “River of Shadows: Eadweard Muybridge and the Technological Wild West” by Rebecca Solnit. It deals with the 19th century and the arrival of speed with the coming of the industrial age. We were very much governed by nature before; we were at the mercy of our own speed and horses and the like. It’s interesting to think of living at that pace.

For the full interview, see:
KATE MURPHY. “DOWNLOAD; Gary Oldman.” The New York Times, SundayReview Section (Sun., February 5, 2012): 2.
(Note: ellipses added; bold in original.)
(Note: online version of the interview is dated February 4, 2012.)

Our Cups Will Runneth Over If We Choose Entrepreneurship, Imagination, Will and Optimism

Source of book image: http://www.abundancethebook.com/wp-content/uploads/2012/01/cover-NYTimes-3d-500.jpg?139d23

(p. 18) in Silicon Valley, where the locals tend to be too busy starting companies to wallow in gloom, Peter Diamandis has stood out as one of the more striking optimists. Several years ago, Diamandis founded the X Prize Foundation, which rewards entrepreneurs with cash for achieving difficult goals, like putting a reusable spaceship into flight on a limited budget. More recently he helped start Singularity University, an academic program that convenes several weeks a year in the Valley and educates business leaders about the “disruptive” — i.e., phenomenally innovative — technological changes Diamandis is anticipating. To be sure, Diamandis is both very bright (he studied molecular biology and aerospace engineering at M.I.T. before getting an M.D. at Harvard) and well informed. Moreover, he’s not the kind of optimist who will merely see the glass as half full. He’ll give you dozens of reasons, some highly technical, why it’s half full. Then he’ll explain that your cognitive biases are tricking you into seeing the glass of water in a negative light, and cart out the research of acclaimed psychologists like Daniel Kahneman to prove his point. Finally he may suggest you stop fretting: new technologies will soon fill the glass up anyway. Indeed, they are likely to overfill it.
. . .
(p. 19) Throughout the book Diamandis . . . offers small groups of driven entrepreneurs as a kind of Leatherman solution to the world’s problems. It’s true that plenty of insurgents are doing impressive things out there — Elon Musk’s Tesla Motors, which helped jump-start the world’s electric car industry, is a good example.
. . .
. . . , there’s a significant idea embedded within “Abundance”: We should remain aware, as writers like Jared Diamond have likewise told us, that societies can choose their own future, and thus their own fate. In that spirit Diamandis and Kotler put forth a range of possible goals we may achieve if we have the imagination and the will. A little optimism wouldn’t hurt, either.

For the full review, see:
JON GERTNER. “Plenty to Go Around.” The New York Times Book Review (Sun., April 1, 2012): 18 & 19.
(Note: ellipses added.)
(Note: the online version of the review has the date March 30, 2012.)

The book under review is:
Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.

Even with Subsidies and High Gas Prices, Electric Cars Cost More

(p. 12) The Ford Focus Electric has a base price of $39,995 — minus a $7,500 federal tax credit and a $2,500 rebate in California. That puts its tab at $30,000, some $7,000 above the upscale Focus Titanium. I can hear the electric naysayers exclaiming “Aha! You won’t make back the savings at the pumps.” That’s despite $4 gasoline, and the Focus Electric’s 110 m.p.g. equivalent rating.
But when buying any new car, especially an innovative model of any kind, emotions, aesthetics and externalities eclipse economics.

For the full story, see:
BRADLEY BERMAN. “BEHIND THE WHEEL; 2012 FORD FOCUS ELECTRIC; The Battery-Driven Car Just Got a Lot More Normal.” The New York Times, SportsSunday (Sun., May 6, 2012): 12.
(Note: online version of the story is dated May 4, 2012.)

Feds Subsidize First Solar’s Losing Technology

(p. B2) First Solar’s solar-panel business, which is focused on large solar installations that feed electricity to power companies, is dependent on government subsidies awarded to such developments.
. . .
But some worry that First Solar isn’t well positioned for industry trends. The global solar-power market is moving toward rooftop solar-power systems, rather than the large-scale utility power plants where First Solar’s products are most effective, said Jesse Pichel, an analyst at Jefferies Group Inc.
“This was a market leader, but its technology is being usurped or surpassed by the Chinese,” said Mr. Pichel. “Their product is not competitive in the most economic and sustainable solar market, which is rooftop.”

For the full story, see:
CASSANDRA SWEET And RUSSELL GOLD. “First Solar Cuts 2,000 Jobs; Panel Maker Laying Off 30% of Workers, Slashing Production Amid Supply Glut.” The Wall Street Journal (Weds., April 18, 2012): B2.
(Note: ellipsis added.)
(Note: online version of the story is dated April 17, 2012.)

“A123 Systems” Battery Company Is Another Example of Failed Industrial Policy

The YouTube video embedded above was from a CBS Evening News broadcast in June 2012. It illustrates the difficulty of the government successfully selecting the technologies, and companies, that will eventually prove successful. (The doctrine that government can and should do such selection is often called “industrial policy.”)

The Obama administration has bet billions of tax dollars on lithium ion batteries for electric vehicles that A123 Systems won $249 million of. But as Sharyl Attkisson reports, expensive recalls and other setbacks have put substantial doubt in the company’s ability to continue.

The text above, and the embedded video clip were published on YouTube on Jun 17, 2012 by CBSNewsOnline at http://www.youtube.com/watch?v=k4Ugklc0rIo

Electric Car “Hype is Gone” and Challenges Remain

(p. 7) . . . is this what an emergent technology looks like before it crosses the valley of death?
“Face it, this is not an easy task,” said Brett Smith, assistant research director at the Center for Automotive Research in Ann Arbor, Mich. “You still have an energy storage device that’s not ready for prime time. You still have the chicken and egg problem with the charging infrastructure. That’s not to say it’s not viable over the long run. But the hype is gone and the challenges are still there.”
The market for all-electric and plug-in electric cars in the United States is tiny, amounting to fewer than 20,000 sales last year out of total light-vehicle sales of 12.8 million. Even in optimistic forecasts, plug-in vehicles will account for less than 5 percent of the global market by 2025.

For the full commentary, see:
JOHN BRODER. “NEWS ANALYSIS; The Electric Car, Unplugged.” The New York Times, SundayReview Section (Sun., March 25, 2012): A8.
(Note: ellipsis added.)
(Note: online version of the commentary is dated March 24, 2012.)

In Antitrust, as in Medicine, First Do No Harm

(p. 94) Western Union’s lawyers carne up with a dusty old New York Stale law, dated 1905, that said no one could buy more than 10 percent of a telegraph company chartered in that state without the approval of Albany lawmakers. Hard to believe, but it was right there in black and white and there was no possibility of getting the New York State legislature to understand why it was vital to build digital highways.
Talk about unintended consequences!
(p. 95) Originally, the law was written to stop Western Union from monopolizing the telegram business, but the law backfired and was used by the monopolist for its own protection.

Source:
Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.

Proof of Concept: “A Determined Entrepreneur Can Start a Rocket Company from Scratch”

‘The Falcon 9 rocket seen in a time-exposure photograph during liftoff.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A13) CAPE CANAVERAL, Fla. — He does not have the name recognition of some other space entrepreneurs, people like Richard Branson, the founder of the Virgin empire, or Paul Allen of Microsoft fame, or Jeff Bezos, the Amazon.com billionaire.

That will probably change if things keep going his way. Elon Musk, a computer prodigy and serial entrepreneur whose ambitions include solving the world’s energy needs and colonizing the solar system, was the man of the hour — or of 3:44 a.m. Tuesday, Eastern time — when the rocket ship built by his company, SpaceX, lifted off gracefully in a nighttime launching and arced off in a streak of light amid loud applause.
. . .
If all goes as planned, his unmanned Dragon capsule, lifted into orbit by his Falcon 9 rocket, will berth at the International Space Station on Friday bearing a modest cargo: 162 meal packets (45 of them low-sodium), a laptop computer, a change of clothes for the station astronauts and 15 student experiments.
Far more important than the supplies is the proof of concept. Mr. Musk is trying to show the world that a determined entrepreneur can start a rocket company from scratch and, a decade later, end up doing a job that has until now been the exclusive province of federal governments.
. . .
Just four years ago, SpaceX went through a near-death experience. The first three launchings of the company’s small Falcon 1 rocket failed. One more failure, Mr. Musk said, and he would have run out of money. As he went through a divorce from his first wife, with whom he has five sons, he had to borrow money from friends.
The fourth launching succeeded. Late in 2008, NASA awarded SpaceX the cargo contract. The first two Falcon 9 launchings, in 2010, also succeeded.
Early Tuesday morning, the success streak continued. As the countdown clock hit zero, the engines remained ignited. Less than 10 minutes later, the Dragon was in orbit. It then aced several other early tasks like the deployment of solar arrays and navigational sensors and the testing of GPS equipment.
“Anything could have gone wrong,” Mr. Musk said. “And everything went right, fortunately.”

For the full story, see:
KENNETH CHANG. “Big Day for Entrepreneur Who Promises More.” The New York Times (Weds., May 23, 2012): A13.
(Note: ellipses added.)
(Note: the online version of the story is dated May 22, 2012, and has the title “Big Day for a Space Entrepreneur Promising More.”)

“Elon Musk.” Source of caption and photo: online version of the NYT article quoted and cited above.

First Principle for Trustbusters Should Be “Do No Harm”

(p. A2) In essence, Justice says that, beginning in 2008, several plankton, in the form of five publishers, conspired against a whale, Amazon, whose monopoly clout had imposed a $9.99 retail price for e-books.
The deal the publishers eventually reached with Apple unfixed the price of e-books by linking their prices to the cover price of the print version. More importantly, publishers could begin to reclaim the right to set e-book retail prices generally.
. . .
Apple, with 15% of the e-book market, is no monopolist. The five publishers, though Justice insists they dominate trade publishing, account for only about half of e-book sales. Crucially for antitrust, the barriers to entry are zilch: Amazon, with 60% market share, could create its own e-book imprint tomorrow and begin bidding for the most popular authors.
. . .
Let’s go back to “per se” vs. “rule of reason.” Because the 1890 Sherman Act is so sweeping and almost any business arrangement could be read as prohibited, courts understandably evolved a “rule of reason” to distinguish the permissible from the impermissible. Unfortunately, the result has been antitrust as we know it: wild and fluctuating discretion masquerading as law. Retail price maintenance alone has been embraced and dumped so many times by the courts that it must feel like Jennifer Aniston.
“Do no harm” would be a better principle for trustbusters.

For the full commentary, see:
HOLMAN W. JENKINS, JR. “BUSINESS WORLD; Washington vs. Books; What about piracy, low barriers to entry and the fact that literature isn’t chopped liver?” The Wall Street Journal (Sat., April 14, 2012): A15.
(Note: the online version of the commentary is dated April 13, 2012.)