Entrepreneurship – Page 125 – artdiamondblog.com

Structural Reforms Needed to Increase Innovation

(p. A13) . . . , a lack of “demand” is no longer the problem.
. . .
Where, instead, are the problems? John Taylor, Stanford’s Nick Bloom and Chicago Booth’s Steve Davis see the uncertainty induced by seat-of-the-pants policy at fault. Who wants to hire, lend or invest when the next stroke of the presidential pen or Justice Department witch hunt can undo all the hard work? Ed Prescott emphasizes large distorting taxes and intrusive regulations. The University of Chicago’s Casey Mulligan deconstructs the unintended disincentives of social programs. And so forth. These problems did not cause the recession. But they are worse now, and they can impede recovery and retard growth.
These views are a lot less sexy than a unicausal “demand,” fixable by simple, magic-bullet policies. They require us to do the hard work of fixing the things we all agree need fixing: our tax code, our cronyist regulatory state, our welter of anticompetitive and anti-innovative protections, education, immigration, social program disincentives, and so on. They require “structural reform,” not “stimulus,” in policy lingo.

For the commentary, see:
JOHN H. COCHRANE. “OPINION; The Failure of Macroeconomics; When models don’t yield the spending policies they want, some Keynesians abandon models–but not the spending.” The Wall Street Journal (Thur., July 3, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the commentary has the date July 2, 2014.)

Established Companies Are Not Structured for Exponential Growth

(p. A13) Why are large tech companies losing the ability to innovate? Entrepreneur and author Salim Ismail studies the new generation of “exponential corporations,” enterprises that grow 10 times faster than the average rate. He believes that established companies simply aren’t structured for this kind of speed. So their only choice is to buy those companies that can still innovate rapidly.
If Mr. Ismail is correct–and the current dynamic in Silicon Valley suggests that he may be–we’re on the brink of a major restructuring of business strategy, venture capital and almost every part of the high-tech world. It may be time to stop waiting for famous tech companies to roll out the hottest new product and start investing in startups that can sell their innovations to big companies. Tech appears to be evolving into a different kind of field: one that is, paradoxically, more static at the top but also more dependent on entrepreneurship than ever before.

For the full commentary, see:
MICHAEL S. MALONE. “An Innovation Slowdown at the Tech Giants; Seen anything new and big lately from Cisco, Yahoo or even Twitter?” The Wall Street Journal (Weds., July 2, 2014): A13.
(Note: the online version of the commentary has the date July 1, 2014.)

The Ismail research mentioned above, is discussed further in:
Ismail, Salim, Mike Malone, and Yuri van Geest. Exponential Organizations: Why New Organizations Are Ten Times Better, Faster, Cheaper Than Yours (and What to Do About It). New York: Diversion Books, 2014.

Poggio Helped Invent Italics Script

(p. 115) What Poggio accomplished, in collaboration with a few others, remains startling. They took Carolingian minuscule–a scribal innovation of the ninth-century court of Charlemagne–and transformed it into the script they used for copying manuscripts and writing letters. This script in turn served as the basis for the development of italics. They were then in effect the inventors of the script we still think of as at once the clearest, the simplest, and the most elegant written representation of our words. It is difficult to take in the full effect without seeing it for oneself, for example, in the manuscripts preserved in the Laurentian Library in Florence: the smooth bound volumes of vellum, still creamy white after more than five hundred years, (p. 116) contain page after page of perfectly beautiful script, almost magical in its regularity and fineness.

Source:
Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.

John Jacob Astor on Why His Son Gave More to Charity

John Jacob Astor . . . enjoyed making fun of his own foibles, including his carefully restrained charitable instincts. One day when a man dropped by his office to solicit a contribution to some worthy cause, Astor grumpily wrote out a check. Looking at the paltry amount from the richest man in the country in some dismay, the man said that Astor’s son, William, had already given twice as much.
“Ah, well,” replied Astor, “but then William has a rich man for a father.”

Source:
Klepper, Michael, and Robert Gunther. “The American Heritage 40.” American Heritage 49, no. 6 (Oct. 1998): 56-66.
(Note: ellipsis added.)

Rollin King Found Legal Way to Avoid Fed’s Regulations

(p. 25) Rollin W. King, a co-founder of Southwest Airlines, the low-cost carrier that helped to change the way Americans travel, died Thursday [June 26, 2014] in Dallas. He was 83.
. . .
The concept for Southwest came to Mr. King when he noticed that businessmen in Texas were willing to charter planes instead of paying the high fares of the domestic airlines.
At the time that Mr. King first proposed the idea to Mr. Kelleher over drinks, the federal government regulated the fares, schedules and routes of interstate airlines, and the mandated prices were high.
Competitors like Texas International Airlines, Braniff International Airways and Continental Airlines waged a protracted legal battle before Southwest could make its first flight. By not flying across state borders, Southwest was able to get around prices set by the Civil Aeronautics Board.

For the full obituary, see:
MICHAEL CORKERY. “Rollin King, 83, Pilot Who Helped Start Southwest Airlines.” The New York Times, First Section (Sun., June 29, 2014): 25.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the obituary has the date June 28, 2014, and has the title “Rollin King, Texas Pilot Who Helped Start Southwest, Dies at 83.”)

Political Entrepreneurs Can Find Ways to Overcome Vested Interests

[p. 202] In their recent book, Leighton and López (2013) place special emphasis on political entrepreneurship in making policy reform possible. For new ideas to overcome vested interests, they write (p. 134), it must be the case that “entrepreneurs notice and exploit those loose spots in the structure of ideas, institutions, and incentives.” They provide four case studies of this process: spectrum license auctions, airline deregulation, welfare reform, and housing finance. In their words (p. 178): “[T]he public face of political change may be that of a madman, an intellectual, or an academic scribbler. But whatever form these leaders may take, they are political entrepreneurs–people whose ideas and actions are focused on producing change.” As these authors stress, political entrepreneurship can be socially harmful, as when the pursuit of individual rents comes at the expense of overall inefficiency. But the returns from shifting the political transformation frontier out can be very large as well.
. . .
(p. 206) I owe a special debt to the recent book by Edward López and Wayne Leighton (2012 sic) for stimulating me to put down on paper a number of ideas I had been mulling over for some time.

Source:
Rodrik, Dani. “When Ideas Trump Interests: Preferences, Worldviews, and Policy Innovations.” Journal of Economic Perspectives 28, no. 1 (Winter 2014): 189-208.
(Note: the bracketed page number refers to the Rodrik article; the page number in parentheses refers to the Leighton and López book; ellipsis added; italics, and the bracketed letter, in the original.)

The book Rodrik discusses is:
Leighton, Wayne A., and Edward J. López. Madmen, Intellectuals, and Academic Scribblers: The Economic Engine of Political Change. Stanford, CA: Stanford University Press, 2013.

“The Lone Commando Who Answers to No One and Breaks Rules to Save Patients Is No Longer a Viable Job Description”

(p. D5) A keen sense of loss permeates “Code Black,” an affecting love letter from a young doctor to his hospital. Over the years, plenty of similar romances have been immortalized in book form, but this may be the first to play out as a documentary, and is surely the first to emerge from our newly reformed health care climate. You’d think you’d be in for some celebration.
But not in the least. In fact, among all its familiar themes, the film’s most striking is the profound sense of estrangement between the young doctors on the screen and all the recent efforts at improving the health care system. The spirit that brought them to medicine and keeps them there, they say over and over, was never even part of the national discussion.
. . .
. . . , as their department chairman points out, the day of the cowboy doctor is over; the lone commando who answers to no one and breaks rules to save patients is no longer a viable job description. Newly smothered in paperwork and quality control, many of these young doctors grieve for a self-image that has ridden off into the sunset.

For the full review, see:
ABIGAIL ZUGER, M.D.. “Saving Lives and Pushing Paper.” The New York Times (Tues., July 1, 2014): D5.
(Note: ellipses added.)
(Note: the online version of the review has the date JUNE 30, 2014.)

Did Intel Succeed in Spite of, or Because of, Tension Between Noyce and Grove?

(p. C5) . . . , much more so than in earlier books on Intel and its principals, the embedded thread of “The Intel Trinity” is the dirty little secret few people outside of Intel knew: Andy Grove really didn’t like Bob Noyce.
. . .
(p. C6) . . . there’s the argument that one thing a startup needs is an inspiring, swashbuckling boss who lights up a room when he enters it and has the confidence to make anything he’s selling seem much bigger and more important than it actually is. And Mr. Malone makes a compelling case that Noyce was the right man for the job in this phase of the company. “Bob Noyce’s greatest gift, even more than his talent as a technical visionary,” Mr. Malone writes, “was his ability to inspire people to believe in his dreams, in their own abilities, and to follow him on the greatest adventure of their professional lives.”
. . .
Noyce hid from Mr. Grove, who was in charge of operations, the fact that Intel had a secret skunk works developing a microprocessor, a single general-purpose chip that would perform multiple functions–logic, calculation, memory and power control. Noyce had the man who was running it report directly to him rather than to Mr. Grove, even though Mr. Grove was his boss on the organizational chart. When Mr. Grove learned what was going on, he became furious, but like the good soldier he was, he snapped to attention and helped recruit a young engineer from Fairchild to be in charge of the project, which ultimately redefined the company.
. . .
Remarkably, none of this discord seemed to have much effect on the company’s day-to-day operations. Mr. Malone even suggests that the dysfunction empowered Intel’s take-no-prisoners warrior culture.
. . .
So while the humble, self-effacing Mr. Moore, who had his own time in the CEO’s chair from 1975 to 1987, played out his role as Intel’s big thinker, the brilliant visionary “who could see into the technological future better than anyone alive,” Mr. Grove was the kick-ass enforcer. No excuses. For anything.

For the full review, see:
STEWART PINKERTON. “Made in America; A Born Leader, a Frustrated Martinet Built One of Silicon Valley’s Giants.” The Wall Street Journal (Sat., July 19, 2014): C5-C6.
(Note: ellipses added.)
(Note: the online version of the review has the date July 18, 2014, and has the title “Book Review: ‘The Intel Trinity’ by Michael S. Malone; A born leader, an ethereal genius and a tough taskmaster built the most important company on the planet.”)

The book under review is:
Malone, Michael S. The Intel Trinity: How Robert Noyce, Gordon Moore, and Andy Grove Built the World’s Most Important Company. New York: HarperCollins Publishers, 2014.

Early Cars Were Playthings of the Idle Rich

Source of book image: http://www.2luxury2.com/wp-content/uploads/2014/02/Steven-Parissien-The-Life-of-the-Automobile-678×1024.jpg

(p. C14) Mr. Parissien writes that Frenchman Nicolas Cugnot may well have built the first mechanical vehicle in 1769, a two-ton, steam-driven colossus that reportedly went out of control and crashed into a wall. It wasn’t until 1885 that Karl Benz, the acknowledged father of the automobile, debuted the first gasoline-powered motorcar, in Mannheim, Germany. It carried passengers just slightly quicker than they could walk.

With the arrival of that breakthrough, however, the race was on for who could come up with a sturdier, faster, more reliable motor car. Many of the innovators’ names are still familiar: Renault, Bentley and Daimler among them. Even piano makers Steinway & Sons tried their hand at building cars. Other companies appeared for a time and then vanished–Durant, Lanchester, Panhard and De Dion-Bouton–victims of bad guesses or bad timing. Much of Mr. Parissien’s story is devoted to the personalities, and eccentricities, of the men who created what for many years amounted to a plaything of the idle rich. Italian luxury builder Ettore Bugatti refused to sell one of his cars to King Zog of Albania because “the man’s table manners are beyond belief.”
It is the despotic Henry Ford who looms large in automotive history, not only for the introduction of his Model T but for his revolutionary system of shoveling raw materials in one end of his half-mile long Rouge River, Mich., factory complex and sending “Tin Lizzies” out the other end.

For the full review, see:
Patrick Cooke. “Book Review: ‘The Life of the Automobile’ by Steven Parissien; The history of cars, from playthings of the idle rich to emblems of the working man.” The Wall Street Journal (Sat., May 24, 2014): C14.
(Note: the online version of the review has the date May 23, 2014, an has the title “Book Review: ‘The Life of the Automobile’ by Steven Parissien; The history of cars, from playthings of the idle rich to emblems of the working man.”)

The book under review is:
Parissien, Steven. The Life of the Automobile: The Complete History of the Motor Car. New York: Thomas Dunne Books, 2014.

Entrepreneur Gutenberg’s Press Creatively Destroyed the Jobs of Scribes

(p. 32) Poggio possessed . . . [a] gift that set him apart from virtually all the other book-hunting humanists. He was a superbly well-trained scribe, with exceptionally fine handwriting, great powers of concentration, and a high degree of accuracy. It is difficult for us, at this distance, to take in the significance of such qualities: our technologies for producing transcriptions, facsimiles, and copies have almost entirely erased what was once an important personal achievement. That importance began to decline, though not at all precipitously, even in Poggio’s own lifetime, for by the 1430s a German entrepreneur, Johann Gutenberg, began experimenting with a new invention, movable type, which would revolutionize the reproduction and transmission of texts. By the century’s end printers, especially the great Aldus in Venice, would print Latin texts in a typeface whose clarity and elegance remain unrivalled after five centuries. That typeface was based on the beautiful handwriting of Poggio and his humanist friends. What Poggio did by hand to produce a single copy would soon be done mechanically to produce hundreds.

Source:
Greenblatt, Stephen. The Swerve: How the World Became Modern. New York: W. W. Norton & Company, 2011.
(Note: ellipsis, and bracketed word, added.)

How Sega Came Out of Nowhere to Leapfrog Near-Monopolist Nintendo

Source of book image: http://images.eurogamer.net/2014/usgamer/original.jpg/EG11/resize/958x-1/format/jpg

(p. C10) “Console Wars” tells how Sega, an unremarkable Japanese manufacturer of games played in arcades, came out of nowhere to challenge Nintendo for dominance of the videogame world in the first half of the 1990s. Nintendo, which had revived the stagnant home videogame category a few years earlier, had something close to a monopoly in 1990 and behaved accordingly, dictating terms to game developers and treating retailers as peons. Sega, in Mr. Harris’s telling, was a disruptive force in a highly concentrated market, introducing more advanced gaming technology, toppling Nintendo from its perch and becoming the largest seller of home videogame hardware in the U.S. by late 1993.

Mr. Harris’s hero is a former Mattel executive named Tom Kalinske, who became president of Sega of America, then a small subsidiary, in 1990. Mr. Kalinske assembled a team of crack marketers who would not have gone near Sega but for his reputation and persuasiveness. Within a year and a half, according to Mr. Harris, Mr. Kalinske’s leadership, along with a new gaming system called Genesis and a marketing assist from a mascot named Sonic the Hedgehog, made Sega the U.S. market leader in videogames.
And then, after only three years at the top, Sega fell from its pedestal. Sega’s management in Japan, suffering mightily from not-invented-here syndrome, rejected Mr. Kalinske’s proposals to collaborate with Sony and Silicon Graphics on new gaming systems. Instead, over his objections, Sega pushed out its ill-conceived Saturn game console in 1995. While Saturn flopped, Sony struck gold with its PlayStation; Silicon Graphics sold its chip with amazing graphics capabilities to Nintendo; and the game, so to speak, was over.
. . .
The author admits he has taken liberties: “I have re-created the scenes in this book using the information uncovered from my interviews, facts gathered from supporting documents, and my best judgment as to what version most closely fits the historical record,” he writes. The result is more a 558-page screenplay than a credible work of nonfiction.

For the full review, see:
MARC LEVINSON. “Sonic Boom; How a no-name company took on Nintendo, tied its fate to a hyperactive hedgehog, and–briefly–won.” The Wall Street Journal (Sat., May 24, 2014): C10.
(Note: ellipsis added.)
(Note: the online version of the review has the date May 23, 2014, an has the title “Book Review: ‘Console Wars’ by Blake J. Harris; How a no-name company took on Nintendo, tied its fate to a hyperactive hedgehog, and–briefly–won.”)

The book under review is:
J., Harris Blake. Console Wars: Sega, Nintendo, and the Battle That Defined a Generation. New York: HarperCollins Publishers, 2014.