SEC Told Google to Delete “Making the World a Better Place” from Document

(p. 150) . . . , the Securities and Exchange Commission was unimpressed by the charms of Page’s “Owner’s Manual.” “Please revise or delete the statements about providing ‘a great service to the world,’ ‘to do things that matter,’ ‘greater positive impact on the world, don’t be evil’ and ‘making the world a better place,'” they wrote. (Google would not revise the letter.) The commission also had a problem with Page’s description of the lawsuit that Overture (by then owned by Yahoo) had filed against Google as “without merit.” Eventually, to resolve this issue before the IPO date, (p. 151) Google would settle the lawsuit by paying Yahoo 2.7 million shares, at an estimated value of between $ 260 and $ 290 million.
That set a contentious tone that ran through the entire process. The SEC cited Google’s irregularities on a frequent basis, whether it was a failure to properly register employee stock options, inadequate reporting of financial results to stakeholders, or the use of only first names of employees in official documents. It acted toward Google like a junior high school vice principal who’d identified an unruly kid as a bad seed, requiring constant detentions.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.
(Note: ellipsis added.)

“I Didn’t Open My Own Company to Have Someone Else Tell Me How to Run It”

TaylorEdwardEntrepreneur2013-09-25.jpg“”They’re picking on my employees,” Edward Taylor, the president of Down East Seafood, said, referring to the commission.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A16) The day after Jonathan Sanchez was released from prison in 2010 after serving three years for a burglary, he walked into Down East Seafood in Hunts Point in the South Bronx and asked for a job, and a second chance. He got both.

But now Mr. Sanchez must document the past he has tried to leave behind, in an 11-page application for a photo identification card issued by a city agency that is responsible for ferreting out organized crime. He is one of hundreds of food workers who have come under scrutiny in recent years by the agency, the New York City Business Integrity Commission, not because of any known ties to mob bosses but simply because they work for a company in Hunts Point.
. . .
“This was my brand new start,” said Mr. Sanchez, 26, who makes $40,000 a year packing lobster orders.
Mr. Sanchez said he worried that his past crime will follow him from job to job and brand him as an ex-con. “I feel violated because I don’t think those things have to be asked,” he said. “I feel that it could stigmatize me.”
. . .
Edward Taylor, the president of Down East Seafood, said more than half of his 60 employees had told him they did not want to complete the application. A couple of them have even said they would instead quit.
Mr. Taylor, who had to answer similar questions himself to register the company, said he would not have moved to Hunts Point from Manhattan in 2005 if he had known about the commission. The company, which he started in 1990 with $500 borrowed from a friend, supplies more than 700 establishments, including Dean & DeLuca, the Harvard and Yale Clubs and the dining rooms at the United Nations.
“They’re picking on my employees,” he said. “I didn’t open my own company to have someone else tell me how to run it.”

For the full story, see:
WINNIE HU. “Food Workers Criticize a Commission’s Scrutiny.” The New York Times (Sat., September 21, 2013): A16.
(Note: ellipses added.)
(Note: the online version of the story has the date September 20, 2013, and has the title “Food Workers in Hunts Point Criticize a Commission’s Scrutiny.”)

Some Entrepreneurs Are Motivated by Desire for Personal Wealth

WorthlessImpossibleAndStupidBK2013-09-21.jpg

Source of book image: online version of the WSJ review quoted and cited below.

I have read many biographies of innovative entrepreneurs. Like the author of the review of the book discussed in the passages quoted below, I believe that they have a variety of motives. But I am more optimistic than the book author that many of the entrepreneurs, those I call “project entrepreneurs,” are motivated mainly by a desire to ‘make a ding in the universe.’ Among these I would count Walt Disney and Steve Jobs.

(p. A11) Successful entrepreneurs, in my experience, are tenacious, hardheaded and creative. They persist with their ideas long after others might have given up, and they are good at persuading clients, partners and investors to take a chance. Like successful people in any field, they are driven by a powerful inner need, sometimes positive, like the hunger to do something entirely original, but often less appealing: a large chip on the shoulder, a desire for revenge, a distaste for authority and in many cases flat-out greed.
. . .
In “Worthless, Impossible, and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value,” Daniel Isenberg, a professor of entrepreneurship at Babson College and before that at Harvard Business School, offers many useful stories of entrepreneurship, culled from his teaching experience. But it isn’t until two-thirds of the way through that he torturously concedes that every entrepreneur needs a streak of Gordon Gekko.
“I have gradually come to the difficult conclusion that the burning desire for extraordinary value capture is almost a sine qua non for the supreme effort required to convert the value from imagined into tangible value,” he writes. “Personal gain is the simplest and most powerful motivation. If a person does not feel deeply that ‘This must pay off for me,’ there will rarely be extraordinary value creation.”

For the full review, see:
PHILIP DELVES BROUGHTON. “BOOKSHELF; Who Moved My Fortune? Some entrepreneurs want to do good. Many more are driven by a chip on the shoulder, a desire for revenge, a distaste for authority.” The Wall Street Journal (Sat., July 31, 2013): A11.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 30, 2013.)

Office Design that Forces Interaction, Causes Exhaustion, Stress, High Errors and Low Productivity

(p. D1) The big push in office design is forcing co-workers to interact more. Cubicle walls are lower, office doors are no more and communal cafes and snack bars abound.
Like most grand social experiments, though, open-plan offices bring an unintended downside: pesky, productivity-sapping interruptions.
The most common disruptions come from co-workers, as tempting as it is to blame email or instant messaging. Face-to-face interruptions account for one-third more intrusions than email or phone calls, which employees feel freer to defer or ignore, according to a 2011 study in the journal Organization Studies.
Other research published earlier this year links frequent interruptions to higher rates of exhaustion, stress-induced ailments and a doubling of error rates.

For the full story, see:
SUE SHELLENBARGER. “WORK & FAMILY; The Biggest Distraction in the Office Is Sitting Next to You.” The Wall Street Journal (Weds., September 11, 2013): D1 & D3.
(Note: the online version of the story has the date September 10, 2013, and has the title “WORK & FAMILY; The Biggest Office Interruptions Are… …not what most people think. And even a 2-second disruption can lead to a doubling of errors.”)

Among the academic papers referred to in the article are:
Wajcman, Judy, and Emily Rose. “Constant Connectivity: Rethinking Interruptions at Work.” Organization Studies 32, no. 7 (July 2011): 941-61.
Altmann, Erik M., J. Gregory Trafton, and David Z. Hambrick. “Momentary Interruptions Can Derail the Train of Thought.” Journal of Experimental Psychology: General (Jan. 7, 2013): 1-12.

Nanny Feds Take Revenge on Zucker for Trying to “Save Our Balls”

ZuckerCraigBuckyballsEntrepreneur2013-08-31.jpg

Craig Zucker. Source of caricature: online version of the WSJ article quoted and cited below.

(p. A11) Mr. Zucker is the former CEO of Maxfield & Oberton, the small company behind Buckyballs, an office toy that became an Internet sensation in 2009 and went on to sell millions of units before it was banned by the feds last year.

A self-described “serial entrepreneur,” Mr. Zucker looks the part with tussled black hair, a scraggly beard and hipster jeans. Yet his casual-Friday outfit does little to subdue his air of ambition and hustle.
Nowadays Mr. Zucker spends most of his waking hours fighting off a vindictive U.S. Consumer Product Safety Commission that has set out to punish him for having challenged its regulatory overreach. The outcome of the battle has ramifications far beyond a magnetic toy designed for bored office workers. It implicates bedrock American notions of consumer choice, personal responsibility and limited liability.
. . .
In August 2009, Maxfield & Oberton demonstrated Buckyballs at the New York Gift Show; 600 stores signed up to sell the product. By 2010, the company had built a distribution network of 1,500 stores, including major retailers like Urban Outfitters and Brookstone. People magazine in 2011 named Buckyballs one of the five hottest trends of the year, and in 2012 it made the cover of Brookstone’s catalog.
Maxfield & Oberton now had 10 employees, 150 sales representatives and a distribution network of 5,000 stores. Sales had reached $10 million a year. “Then,” says Mr. Zucker, “we crashed.”
On July 10, 2012, the Consumer Product Safety Commission instructed Maxfield & Oberton to file a “corrective-action plan” within two weeks or face an administrative suit related to Buckyballs’ alleged safety defects. Around the same time–and before Maxfield & Oberton had a chance to tell its side of the story–the commission sent letters to some of Maxfield & Oberton’s retail partners, including Brookstone, warning of the “severity of the risk of injury and death possibly posed by” Buckyballs and requesting them to “voluntarily stop selling” the product.
It was an underhanded move, as Maxfield & Oberton and its lawyers saw it. “Very, very quickly those 5,000 retailers became zero,” says Mr. Zucker. The preliminary letters, and others sent after the complaint, made it clear that selling Buckyballs was still considered lawful pending adjudication. “But if you’re a store like Brookstone or Urban Outfitters . . . you’re bullied into it. You don’t want problems.”
. . .
Maxfield & Oberton resolved to take to the public square.On July 27, just two days after the commission filed suit, the company launched a publicity campaign to rally customers and spotlight the commission’s nanny-state excesses. The campaign’s tagline? “Save Our Balls.”
Online ads pointed out how, under the commission’s reasoning, everything from coconuts (“tasty fruit or deadly sky ballistic?”) to stairways (“are they really worth the risk?”) to hot dogs (“delicious but deadly”) could be banned.
. . .
. . . in February [2013] the Buckyballs saga took a chilling turn: The commission filed a motion requesting that Mr. Zucker be held personally liable for the costs of the recall, which it estimated at $57 million, if the product was ultimately determined to be defective.
This was an astounding departure from the principle of limited liability at the heart of U.S. corporate law.
. . .
Given the fact that Buckyballs have now long been off the market, the attempt to go after Mr. Zucker personally raises the question of retaliation for his public campaign against the commission. Mr. Zucker won’t speculate about the commission’s motives. “It’s very selective and very aggressive,” he says.

For the full interview, see:
SOHRAB AHMARI, interviewer. “THE WEEKEND INTERVIEW with Craig Zucker; What Happens When a Man Takes on the Feds; Buckyballs was the hottest office game on the market. Then regulators banned it. Now the government wants to ruin the CEO who fought back.” The Wall Street Journal (Sat., August 31, 2013): A11.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the interview has the date August 30, 2013, and has the title “THE WEEKEND INTERVIEW; Craig Zucker: What Happens When a Man Takes on the Feds. Buckyballs was the hottest office game on the market. Then regulators banned it. Now the government wants to ruin the CEO who fought back.”)

Growth of Labor Safety Net Made Great Recession Deeper and Longer

TheRedistributionRecessionBK2013-09-05.jpg

Source of book image: http://si.wsj.net/public/resources/images/OB-VE881_bkrvre_GV_20121101145828.jpg

(p. 309) [Mulligan’s empirical results suggest] that employment was dropping not only because of declining demand for the employees’ products, but also because employers were substituting capital and other factors for labor. This surprising finding suggests that although a decline in aggregate demand for goods and services was one of the reasons for the decline in labor, other causes were also at play in most sectors of the economy. This fact is consistent with an inward shift in the supply of labor to the marketplace during this period.

In chapter 3, Mulligan introduces the main culprit responsible for this supplycurve shift–the unintended consequences of increases in the social safety net that substantially increased the marginal tax rate on work. In his model, Mulligan operationalizes this force into changes in the replacement rate (the fraction of productivity that the average nonemployed person receives in the form of means-tested benefits) and the self-reliance rate (1 minus the replacement rate), which is the fraction of lost productivity not replaced by means-tested benefits.
His conjecture is that, in a reverse of government policies in the 1990s that made work pay for single mothers by transforming welfare as we knew it into a program that nudged single mothers off the Aid to Families with Dependent Children rolls and into the workforce, “temporary” government program expansions to mitigate the (p. 310) short-run consequences of unemployment and the bursting of the housing bubble made a prolonged paid period of nonwork an offer that many Americans found too tempting to refuse.
Mulligan identifies and incorporates the major expansions in eligibility and benefit amounts for Unemployment Insurance and food stamps into an eligibility index that shows that most of the 199 percent growth in these programs between 2007 and 2009 was due to these changes. He uses this growth rate in a weighted index of overall statutory safety-net generosity to determine the degree to which it has influenced overall employment. He does a similar analysis of the means-tested Home Affordable Modification Program (HAMP), which facilitated substantial lender-provided discounts on home mortgage expenses for unemployment insurance-eligible workers. He finds that these market distortions that increased the marginal tax on work grew substantially in 2008, peaked in 2009–at almost triple their 2007 level–and then modestly fell in 2010 to a level appreciably above the 2007 level.
. . .
But his empirical evidence shows that the implementation of these “recession cures” was primarily responsible for the Great Recession’s depth and duration.

For the full review, see:
Burkhauser, Richard V. “Review of: “The Redistributive Recession: How Labor Market Distortions Contracted the Economy” by Casey B. Mulligan.” The Independent Review 18, no. 2 (Fall 2013): 308-11.
(Note: ellipsis, and words in brackets, added.)

Book that is under review:
Mulligan, Casey B. The Redistribution Recession: How Labor Market Distortions Contracted the Economy. New York: Oxford University Press, USA, 2012.

Brazil’s Cardozo Envies England’s Rule of Law

PalinMichael2013-08-31.jpg

“Michael Palin.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. C11) For his most recent project in Brazil, which will go on to become a PBS series, Mr. Palin interviewed former Brazilian President Fernando Cardoso, who is often credited with the country’s economic turnaround. Whereas he says most political leaders are hesitant to say anything controversial, Mr. Cardoso was refreshingly straightforward. “I asked him, ‘Brazil has so many good things going for it–the people are friendly and relaxed, the economy is booming. Is there anything you envy about us in England?’ ” He was surprised by Mr. Cardoso’s answer. “He said straight out, ‘The rule of law.’ He said, ‘Our problem here is we have endemic corruption,’ ” says Mr. Palin. “I just thought it was incredibly honest for a world leader.”

For the full story, see:
ALEXANDRA WOLFE. “WEEKEND CONFIDENTIAL; Michael Palin Takes on the World; The former Monty Python performer is turning his global adventures into comic tales.” The Wall Street Journal (Sat., August 31, 2013): C11.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date August 30, 2013.)

To Save Lego, CEO Fired Almost a Third of Workers

BrickByBrickBK2013-09-02.jpg

Source of book image: online version of the WSJ review quoted and cited below.

(p. A15) Only 10 years ago, Lego was posting record losses; retailers were backlogged with unsold Lego toys; and it was unclear whether Lego would survive as an independent company. An internal review discovered that 94% of the sets in its product line were unprofitable. The turnaround story that followed is well told by Wharton professor David Robertson in “Brick by Brick.”
. . .
Upon coming to power, Mr. Knudstorp cut 30% of Lego’s product portfolio, including many of its newer offerings. To stave off financial doom, he also sold the company’s headquarters building and moved into simpler accommodations–and, more painfully, let go almost a third of the workforce.
But how to move beyond the rescue stage and toward growth? Based on input from top retailers and a large customer-research study, Lego executives concluded that even though young fans of buildable toys were a minority, there were enough of them to make a worthwhile market–and their parents were willing to pay premium prices. The company would now organize its innovation efforts around its potentially very profitable core audience.
Mr. Robertson, with the benefit of access to staff at Lego and partner companies, provides unusually detailed reporting of the processes that led to Lego’s current hits (and, inevitably, some misses). Among the hits is the Mindstorms NXT, the second generation of Lego’s robotics set, which hadn’t been updated or advertised since 2001. Mr. Robertson describes how Lego navigated between relying on sophisticated users to determine the product’s design and relying on its own expertise in the creation of building experiences.

For the full review, see:
DAVID A. PRICE. “BOOKSHELF; The House That Lego Built; Lego balked at licensing warlike ‘Star Wars’ toys. But then anthropological research convinced company executives that kids like to compete.” The Wall Street Journal (Tues., July 23, 2013): A15.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 22, 2013.)

The book under review, is:
Robertson, David. Brick by Brick: How Lego Rewrote the Rules of Innovation and Conquered the Global Toy Industry. New York: Crown Business, 2013.

When Google Earned a Profit, Sergey Brin “Felt Like We Had Built a Real Business”

(p. 94) . . . , Google was reaping rewards, and 2002 was its first profitable year. “That’s really satisfying,” Brin said at the time. “Honestly, when we were still in the dot-com boom days, I felt like a schmuck. I had an Internet start-up– so did everybody else. It was unprofitable, like everybody else’s, and how hard is that? But when we became profitable, I felt like we had built a real business.”

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.
(Note: ellipsis added.)

Yahoo Valued “Marketing Gimmicks” More than Search Speed

(p. 44) Google had struck a deal to handle all the search traffic of Yahoo, one of the biggest portals on the web.
The deal–announced on June 26, 2000–was a frustrating development to the head of Yahoo’s search team, Udi Manber. He had been arguing that Yahoo should develop its own search product (at the time, it was licensing technology from Inktomi), but his bosses weren’t interested. Yahoo’s executives, led by a VC-approved CEO named Timothy Koogle (described in a BusinessWeek cover story as “The Grown-up Voice of Reason at Yahoo”), instead were devoting their attention to branding–marketing gimmicks such as putting the purple corporate logo on the Zamboni machine that swept the ice between periods of San Jose Sharks hockey games. “I had six people working on my search team,” Manber said. “I couldn’t get the seventh. This was a company that had thousands of people. I could not get the seventh.” Since Yahoo wasn’t going to develop its own search, Manber had the task of finding the best one to license.

Source:
Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.
(Note: italics in original.)

In Conflict Between Ecologist and Economist, the Economist Won

EhrlichSimonCaricature2013-08-31.jpg Paul Ehrlich (left) and Julian Simon (right). Source of caricature: online version of the WSJ review quoted and cited below.

(p. C6) . . . in 1980 Simon made Mr. Ehrlich a bet. If Mr. Ehrlich’s predictions about overpopulation and the depletion of resources were correct, Simon said, then over the next decade the prices of commodities would rise as they became more scarce. Simon contended that, because markets spur innovation and create efficiencies, commodity prices would fall. He proposed that each party put up $1,000 to purchase a basket of five commodities. If the prices of these went down, Mr. Ehrlich would pay Simon the difference between the 1980 and 1990 prices. If the prices went up, Simon would pay. This meant that Mr. Ehrlich’s exposure was limited while Simon’s was theoretically infinite.
. . .
In October 1990, Mr. Ehrlich mailed a check for $576.07 to Simon.
. . .
Mr. Ehrlich was more than a sore loser. In 1995, he told this paper: “If Simon disappeared from the face of the Earth, that would be great for humanity.” (Simon would die in 1998.)
. . .
Mr. Sabin’s portrait of Mr. Ehrlich suggests that he is among the more pernicious figures in the last century of American public life. As Mr. Sabin shows, he pushed an authoritarian vision of America, proposing “luxury taxes” on items such as diapers and bottles and refusing to rule out the use of coercive force in order to prevent Americans from having children. In many ways, Mr. Ehrlich was an early instigator of the worst aspects of America’s culture wars. This picture is all the more damning because Mr. Sabin paints it not with malice but with sympathy. A history professor at Yale, Mr. Sabin shares Mr. Ehrlich’s devotion to environmentalism. Yet this affinity doesn’t prevent Mr. Sabin from being clear-eyed.
At heart, “The Bet” is about not just a conflict of men; it is about a conflict of disciplines, pitting ecologists against economists. Mr. Sabin cautiously posits that neither side has been completely vindicated by the events of the past 40 years. But this may be charity on his part: While not everything Simon predicted has come to pass, in the main he has been vindicated.
. . .
Mr. Ehrlich may have been defeated in the wager, but he has continued to flourish in the public realm. The great mystery left unsolved by “The Bet” is why Paul Ehrlich and his confederates have paid so small a price for their mistakes. And perhaps even been rewarded for them. In 1990, just as Mr. Ehrlich was mailing his check to Simon, the MacArthur Foundation awarded him one of its “genius” grants. And 20 years later his partner in the wager, John Holdren, was appointed by President Obama to be director of the White House Office of Science and Technology Policy.

For the full review, see:
JONATHAN V. LAST. “A Prediction that Bombed; Paul Ehrlich predicted an imminent population catastrophe; Julian Simon wagered he was wrong.” The Wall Street Journal (Sat., August 31, 2013): C6.
(Note: ellipses added.)
(Note: the online version of the review has the date August 30, 2013, and has the title “Book Review: ‘The Bet’ by Paul Sabin; Paul Ehrlich predicted an imminent population catastrophe–Julian Simon wagered he was wrong.”)

The book discussed above is:
Sabin, Paul. The Bet: Paul Ehrlich, Julian Simon, and Our Gamble over Earth’s Future. New Haven, Conn.: Yale University Press, 2013.

TheBetBK2013-08-31.jpg

Source of book image: http://paulsabin.com/wp-content/uploads/2013/06/sabin_the_bet_wr.jpg