Category: Entrepreneurship

Tech Replaces Labor When Government Raises Labor Costs

(p. A11) In late 2013, Chili’s and Applebee’s announced that they were installing more than 100,000 tableside tablets at their restaurants across the country, allowing customers to order and pay their bill without ever talking to a waiter. The companies were soon followed by Buffalo Wild Wings, Panera Bread, Olive Garden and dozens of others. This means fewer servers covering more tables. Quick-service restaurant chains are also testing touch-screen ordering.
. . .
So why the increased use of technology? The major reason is consumer preference. Research shows that many appreciate the speed, order accuracy, and convenience of touch screens. This is particularly so among millennials who already do so much on smartphones and tablets. I’ve watched people–young and old–waiting in line to use the touch screens while employees stand idle at the counter.
The other reason is costs. While the technology is becoming much cheaper, government mandates have been making labor much more expensive.
In 2015, 14 cities and states approved $15 minimum wages–double the current federal minimum. Additionally, four states, 20 cities and one county now have mandatory paid-sick-leave laws generally requiring a paid week of time off each year per covered employee. And then there’s the Affordable Care Act, which further raises employer costs.

For the full commentary, see:
ANDY PUZDER. “Why Restaurant Automation Is on the Menu; Forget about robot waiters, but technology helps cut government-imposed costs. And consumers like it.” The Wall Street Journal (Fri., March 25, 2016): A11.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date March 24, 2016.)

Frackers Have “Enthusiasm, Empiricism, Technical Inventiveness, and Fearlessness to Try and Err”

(p. A9) It’s a complicated yarn that Gary Sernovitz, a novelist and energy investor, spins in “The Green and the Black” and one that is still revealing fresh plot twists. Just last week, the shale boom’s most Shakespearean figure, Aubrey McClendon, died in a car crash the day after he was indicted on charges that he had rigged bids for oil and gas leases in Oklahoma. McClendon was dazzlingly ambitious and persuasive, if perhaps blithe to humdrum legalities.
Other pioneers of America’s new energy age have been equally vivid. George Mitchell of Mitchell Energy was a Greek immigrant who began wildcatting in the 1950s and fracked the Barnett Shale in Texas for nearly two decades before he could make it work financially. By that time he was 77. Harold Hamm of Continental Resources, the 13th child of Oklahoma sharecroppers, became a multi-billionaire by fracking the Bakken formations across Montana and North Dakota. It was men like these, willing to keep buying land and drilling whether they were nearly bankrupt or billionaires, that Mr. Sernovitz credits for the shale revolution.
. . .
He writes: “For those who lament that America no longer makes anything but bond traders, for those who think that ‘maker’ culture only exists in a bearded guy pickling compassionately farmed okra in Austin, spend some time with oil industry engineers to absorb their enthusiasm, empiricism, technical inventiveness, and fearlessness to try and err.”

For the full review, see:
PHILIP DELVES BROUGHTON. “BOOKSHELF; The Shale Revolutionaries; There are energy deposits all over the world. Yet drilling oil and gas out of once-inaccessible shale was only pursued vigorously in the U.S.”The Wall Street Journal (Fri., March 18, 2016): A9.
(Note: ellipsis added.)
(Note: the online version of the review has the date March 17, 2016.)

The book under review, is:
Sernovitz, Gary. The Green and the Black: The Complete Story of the Shale Revolution, the Fight over Fracking, and the Future of Energy. New York: St. Martin’s Press, 2016.

Federal Regulations Restrict Concrete Innovation

(p. B1) Chris Tuan, a professor of civil engineering for the University of Nebraska at the Peter Kiewit Institute, has been perfecting an electrically semiconductive concrete over the past 20 years.
The mixture includes a 20 percent mix of steel fibers, shavings and carbon added to a traditional concrete mix. Steel reinforcing bars serve as the conductor, and once electricity is added, the concrete heats to 35 to 40 degrees — just enough to melt the ice and snow.
. . .
For now, the concrete can’t be used in public spaces. Anything exposed and electrified above 48 volts — much less than the 208 volts used in Tuan’s concrete — is considered high voltage and is not allowed. Federal law will have to be rewritten to change that.
. . .
Tuan said traditional concrete needs to be replaced every five years or so. Without chemical use, the electric concrete lasts much longer, with fewer potholes. His concrete is also maintenance-free, because the power cords and conductive rods are encased in the concrete and not exposed to the elements.
. . .
In 2013 Tuan also implemented his concrete on ramps in China. He recently installed a private driveway in Regency using the legally allowed 48-volt limit, which is less energy efficient.
“If the government or if insurance agencies approve this technology, then everybody can use it,” Tuan said. “But right now, it’s almost cost prohibitive.”

For the full story, see:
Reece Ristau. “In Concrete World, This Is Hot Stuff.” Omaha World-Herald (Tues., JAN. 15, 2016): B1 & B2.
(Note: ellipses added.)
(Note: the online version of the story has the title “Special Concrete Mix Can Melt Snow and Ice All by Itself — Just Add Electricity.”)

The Use of Virtual Reality (VR) in Education and Training

(p. B5) The thing that’s especially difficult to convey about “room-scale” VR–the kind enabled by the HTC Vive, where you can actually walk around with a headset on, exploring a virtual environment in exactly the same way you would experience a real one–is just how compelling it is. “Any VR experience is so much more engrossing than any you’d have on a flat screen,” says Patrick Hackett, senior user interface designer at Google for the Google Cardboard VR headset.
That has potentially huge implications for education.
Amir Rubin, head of VR software company Sixense, is working with a client on a system to train thousands of technicians to decommission nuclear-power plants. “Any application that has high liability, where teaching students has a high cost of insurance, and is high risk, we’re seeing people ask for VR training,” says Mr. Rubin. At Stanford, Dr. Bailenson is taking students on virtual tours of the world’s great works of art–letting them clamber over and deeply experience, for example, Michelangelo’s “David.”

For the full commentary, see:
CHRISTOPHER MIMS. “Virtual Reality Isn’t Just About Games.” The Wall Street Journal (Mon., Aug. 3, 2015): B1 & B5.
(Note: the online version of the commentary has the date Aug. 2, 2015.)

Working for Uber Allows Flexibility for Aspiring Actors

(p. 8) Not long ago, being a waiter at the Ivy or a salesman at Fred Segal was considered the reliable way to earn a living until one got a big break in a Wes Anderson film and got picked up by a major Hollywood agency like CAA or WME.
But Krystal Harris, 27, an actress who appeared in the recent Kevin Hart film “About Last Night,” quickly realized those sorts of jobs were overrated. So now she works primarily for Lyft.
“I was a lead hostess at three different restaurants,” Ms. Harris said. “It really didn’t allow for much flexibility at all. I ended up getting fired for going to an audition. Even when I got my shifts covered, they gave me a hard time.”
In 2013, she turned her Ford Escape into a roving cash register. She had total control over her hours, never needing to clear her schedule with anyone for a last-minute audition. There weren’t even rules against working for both Uber and Lyft.
When acting gigs were hard to come by, she drove as many as 40 hours a week, earning what she estimated was about $20 an hour after Uber and Lyft took their commissions (generally around 20 percent). If the casting gods shined on her, she simply shut off the apps.
“When I’m really on a roll, I don’t have to work,” she said. “As long as my insurance and registration are up to date, I can go back.”
Mr. Totten had a similar experience. Before driving for Uber, he worked at a half-dozen restaurants. All those jobs ended when he had to take off for auditions, or was caught trying to learn lines on the job. Once, he refused to shave because a casting director was looking for someone with stubble.
“My look is my scruff,” said Mr. Totten, who is blond and blue-eyed, with a James Dean meets 90210 appeal. “As soon as I started driving for Uber, things got better.”
. . .
(p. 9) Recently, Mr. Totten considered getting a new side job. “I’m probably going to do Postmates,” he said, referring to the app-based service that delivers artisanal food in under 60 minutes and guarantees its drivers a minimum of $25 an hour. “You can’t live on this anymore.”

For the full story, see:
JACOB BERNSTEIN. “Drivers With Head Shots.” The New York Times, SundayStyles Section (Sun., JAN. 24, 2016): 1 & 8-9.
(Note: ellipsis added.)
(Note: the online version of the story has the date JAN. 23, 2016, and has the title “The New Side Job for Actors and Artists in Los Angeles: Driving.”)

Yamir Jackson-Adens on How You Learn

(p. B4) PHILANTHROPISTS have poured millions of dollars into improving education in the United States — paying for new buildings, buying new computers and even creating new charter schools.
Susan Crown, a member of the billionaire Crown family of Chicago, is trying something different. Two years ago, she began working with organizations that seek to foster character traits like grit, empathy and perseverance, which studies show can be determinants of future success.
But financing organizations that focus on social and emotional learning programs for disadvantaged children was just part of the effort. Ms. Crown said she also wanted to go deeper into understanding why some organizations succeeded so well.
, , ,
Yamir Jackson-Adens, 18, began going to the Philadelphia Wooden Boat Factory in eighth grade. Living in a poor section in the northeast part of the city, he said he had been bullied in elementary school, and he was still shy. The boat program intrigued him, even though he knew no one who owned a boat.
“In boat building, you learn stuff,” Mr. Jackson-Adens said. “You’re free to move. You don’t have a whole lot of restrictions. It’s more of a trial-and-error kind of thing. You learn from those mistakes. In school, if you fail, you’ve failed.”
. . .
Next fall, Mr. Jackson-Adens will be attending Colorado State University to begin studies that he hopes will lead to becoming a veterinarian.
“Boat got me into thinking outside the box,” he said. “It helped me adjust to different situations.”
That is a life skill anyone could use.

For the full story, see:
PAUL SULLIVAN. “A Philanthropist Drills Down to Discover Why Programs Work.” The New York Times (Sat., Feb. 6, 2016): B4.
(Note: ellipsis added.)
(Note: the online version of the article has the date Feb. 5, 2016.)

Serendipity May Be Source of 50% of Patents

(p. 1) A surprising number of the conveniences of modern life were invented when someone stumbled upon a discovery or capitalized on an accident: the microwave oven, safety glass, smoke detectors, artificial sweeteners, (p. 4) X-ray imaging. Many blockbuster drugs of the 20th century emerged because a lab worker picked up on the “wrong” information.
. . .
(p. 5) So how many big ideas emerge from spills, crashes, failed experiments and blind stabs? One survey of patent holders (the PatVal study of European inventors, published in 2005) found that an incredible 50 percent of patents resulted from what could be described as a serendipitous process. Thousands of survey respondents reported that their idea evolved when they were working on an unrelated project — and often when they weren’t even trying to invent anything. This is why we need to know far more about the habits that transform a mistake into a breakthrough.
. . .
A number of pioneering scholars have already begun this work, but they seem to be doing so in their own silos and without much cross-talk. In a 2005 paper (“Serendipitous Insights Involving Nonhuman Primates”), two experts from the Washington National Primate Research Center in Seattle cataloged the chance encounters that yielded new insights from creatures like the pigtail macaque. Meanwhile, the authors of a paper titled “On the Exploitation of Serendipity in Drug Discovery” puzzled over the reasons the 1950s and ’60s saw a bonanza of breakthroughs in psychiatric medication, and why that run of serendipity ended.

For the full commentary, see:
PAGAN KENNEDY. “How to Cultivate the Art of Serendipity.” The New York Times, SundayReview Section (Sun., JAN. 3, 2016): 1 & 4-5.
(Note: ellipses added.)
(Note: the online version of the commentary has the date JAN. 2, 2016, and has the title “Cultivating the Art of Serendipity.”)

Pagan’s commentary is based on her book:
Kennedy, Pagan. Inventology: How We Dream up Things That Change the World. New York: Houghton Mifflin Harcourt Publishing Co., 2016.

The Wealth of Project Entrepreneurs Is Fragile

The stories of Alfred E. Mann (below) as well as that of Malcom McLean, the entrepreneur behind standardized shipping containers, support George Gilder’s point that innovative project entrepreneurs have most of their wealth tied up in their projects. Their wealth only stays large as long as the projects continue to go well.

(p. A20) Alfred E. Mann, who started medical device companies that pioneered in the development of pacemakers for erratic hearts, insulin pumps for diabetics, cochlear implants for the deaf and retinal implants for the blind, died on Thursday [February 25, 2016] in Las Vegas. He was 90.
. . .
Mr. Mann, who spent most of his career in the Los Angeles area, became a billionaire from his entrepreneurial activities. His biggest success was MiniMed, which became the leader in insulin pumps, wearable devices that deliver insulin throughout the day, allowing people with diabetes to more precisely control their blood sugar levels.
. . .
In all, Mr. Mann started and largely financed 14 companies, nine of which were acquired for a total of almost $8 billion, according to MannKind.
. . .
In 1979, while running Pacesetter, Mr. Mann was visiting a cardiac ward and was challenged by a doctor there to work on diabetes, which caused many of the heart problems in patients. That led to the creation of MiniMed and later to MannKind, which developed a form of insulin that is inhaled instead of injected.
MannKind, Mr. Mann’s last big venture, may also have been his Waterloo, eating up much of his fortune.
The pharmaceutical giant Pfizer suffered a costly marketing flop with an inhaled form of insulin in 2007. After that, other big insulin manufacturers dropped their own plans for similar products.
But Mr. Mann, who was chief executive of MannKind for many years, would not give up. He insisted MannKind’s inhaler was better than Pfizer’s and that its insulin had desirable medical characteristics beyond being inhalable. He put about $1 billion of his own money into the company he had named for himself, keeping it afloat through years of setbacks.
“I believe this is one of the most valuable products in history in the drug industry, and I’m willing to back it up with my estate,” Mr. Mann told The New York Times in 2007.
The inhaled insulin, called Afrezza, was finally approved by the Food and Drug Administration in 2014, but sales have been dismal. In January, Sanofi, the big French drug company, pulled out of an agreement to market the product. MannKind is now in danger of going out of business, though it is vowing to survive.
“Our resolve is now stronger than ever to continue Al’s legacy of medical innovation, as a tribute to this remarkable man, who did so much to help mankind,” Matthew Pfeffer, chief executive of MannKind, said in a statement Friday.
Mr. Mann, who worked seven days a week even when he was in his 80s, was divorced three times.

For the full story, see:
ANDREW POLLACK. “Alfred E. Mann, 90, Pioneer in Medical Devices, Is Dead.” The New York Times (Sat., FEB. 27, 2016): A20.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date FEB. 26, 2016, and has the title “Alfred E. Mann, Pioneer in Medical Devices, Dies at 90.”)

Gilder defends entrepreneurial wealth in:
Gilder, George. “The Enigma of Entrepreneurial Wealth.” Inc. 14, no. 10 (Oct. 1992): 161-64, 66 & 68.

Technology Extends Capabilities of Older Japanese

(p. A1) TOKYO–At an office-building construction site in the center of Japan’s capital, 67-year-old Kenichi Saito effortlessly stacks 44-pound boards with the ease of a man half his age.
His secret: a bendable exoskeleton hugging his waist and thighs, with sensors attached to his skin. The sensors detect when Mr. Saito’s muscles start to move and direct the machine to support his motion, cutting his load’s effective weight by 18 pounds.
“I can carry as much as I did 10 years ago,” says the hard-hatted Mr. Saito.
Mr. Saito is part of an experiment by Obayashi Corp. , the construction giant handling the building project, to confront one of the biggest problems facing the company and the country: a chronic labor shortage resulting from a rapidly aging population. The exoskeleton has allowed Mr. Saito to extend his working life–and Obayashi to keep building.
. . .
(p. A14) The Fujisawa Aikoen nursing home about an hour outside Tokyo started leasing the “hybrid assistive limb,” or HAL, exoskeletons from maker Cyberdyne Inc. in June.
In Hokkaido, 60-year-old potato-pickers use rubber “smart suits” making it easier to bend over. Baggage handlers at Tokyo’s Haneda airport employ similar assistance.
In cases where older people simply can’t do the job or aren’t available, Japanese manufacturers are turning to robots, which help them keep costs down and continue growing.
Bank of Tokyo Mitsubishi UFJ, Japan’s largest bank, employs a small robot speaking 19 languages to greet customers, while a Nagasaki hotel staffed mainly by robots opened in July. Komatsu Ltd. is developing self-driving vehicles for construction sites, while industrial robot maker Fanuc Corp. is designing machines that repair each other.
Toyota Motor Corp. is testing in homes its “human support robot,” a videophone/remote-controlled android that allows family and friends to perform tasks for distant elderly people as if they were in the same home. In one demonstration, a young man uses a tablet to look around a bed-bound older man’s room, then directs the robot to open the curtains and bring the older man a drink.
SoftBank Group Corp. earlier this year drew global attention when it put on sale in Japan an automaton called Pepper, which it called the world’s first robot capable of understanding emotions. One of the earliest uses for the 4-foot-tall white humanoid is as a nursing helper.
In a Kanagawa Prefecture test, Pepper entertained a room of 30 80- to 90-year-olds for 40 minutes. He led them in light exercises and tested their ability to recognize colors and letters. Women patted his head like a grandchild.
Showing a video of Pepper with a dementia patient on another occasion, Shunji Iyama, one of the developers, says the robot may sometimes work better than people. “That man keeps repeating himself over and over again,” Mr. Iyama said. “If Pepper were human, he’d get fed up, but he just repeats the same reaction and doesn’t get tired.”

For the full story, see:
Jacob M. Schlesinger and Alexander Martin. “Graying Japan Tries to Embrace the Golden Years.” The Wall Street Journal (Mon., Nov. 30, 2015): A1 & A14.
(Note: ellipsis added.)
(Note: the online version of the story has the date Nov. 29, 2015, and has the title “Graying Japan Tries to Embrace the Golden Years.”)

George Washington as Entrepreneur

(p. C7) While Washington was only an adequate battlefield general, Edward G. Lengel, who oversees George Washington’s papers at the University of Virginia, makes a strong case in “First Entrepreneur” that he was a superb military administrator–skills he learned as a young man serving in the French and Indian War as an aide-de-camp for commanding officers. By carefully monitoring all aspects of the complex business of running a military operation, he held his ragtag army together despite a frequent lack of money, clothing, weapons and food. Without Washington’s management, the Continental Army would likely have disintegrated and the Revolution fizzled out. Mr. Lengel brings needed attention to this vital and neglected aspect of Washington’s generalship.
Washington was also a superb administrator of his own assets. Born to modest wealth, he married into much more and worked hard and creatively to maximize his return on investment. By the end of his life he was one of the new country’s richest men.
Tobacco, the cash crop that had brought prosperity to Virginia, was declining in profitability by the mid-18th century. It exhausted the soil, and prices had been falling on the British market. Washington began to rotate and diversify his crops, import better seed, and exploit Mount Vernon’s other assets, such as the springtime fish runs up the Potomac.
By the end of his life, Washington was not only growing new crops but manufacturing as well, turning his wheat production into both whiskey and flour. When the American inventor Oliver Evans developed a new, more productive type of flour mill, Washington quickly installed one. When the king of Spain sent him a donkey, named Royal Gift, Washington put him to work fathering mules, which were more efficient than horses at farm work. As Mr. Lengel makes clear, Washington was always a bottom-line man, a fact that makes this often remote figure more human.

For the full review, see:

JOHN STEELE GORDON. “Washington Discovers America; Washington traveled through all 13 states to promote the newborn federal government.” The Wall Street Journal (Sat., Feb. 13, 2016): C7.

(Note: the online version of the story has the date Feb. 12, 2016.)

The book under review, is:
Lengel, Edward G. First Entrepreneur: How George Washington Built His–and the Nation’s–Prosperity. Philadelphia, PA: Da Capo Press, 2016.

“Minds Feel More Crimped, Fear More Pervasive, Possibility More Limited”

Maybe to lead happy or satisfying lives, we need more adventure, or more projects (hard and important ones) to commit ourselves to?

(p. 19) Freedom is still out there. We all have our idea of it, the deferred dream. Your psyche builds layers of protection around your most vulnerable traits, which may be closely linked to that precious essence in which freedom resides. Freedom is inseparable from risk.

. . .
I don’t know if the world is freer than a half-century ago. On paper, it is. The totalitarian Soviet Imperium is gone. The generals who bossed Latin America are gone, generally. Asia has unshackled itself and claims this century as its own. Media has opened out, gone social.
Yet minds feel more crimped, fear more pervasive, possibility more limited, adventure more choreographed, politics more stale, economics more skewed, pressure more crushing, escape more elusive.
. . .
Which brings me to Finnegan’s wonderful book, a kind of hymn to freedom and passion. Freedom is inside you. It’s the thing that cannot be denied. For Finnegan, that’s surfing and writing. “How could you know your limits unless you tested them?” he asks — a question as true before the ferocious energy of the wave as before the infinite possibilities of the written form.

For the full commentary, see:
Cohen, Roger. “Ways to Be Free.” The New York Times (Sat., JAN. 23, 2016): A19.
(Note: ellipses added.)
(Note: the online version of the commentary has the date JAN. 21, 2016.)

The Finnegan book praised in the passage quoted above, is:
Finnegan, William. Barbarian Days: A Surfing Life. New York: Penguin Press, 2015.