Category: Entrepreneurship

Akio Toyoda Had the Courage to Predict the Current EV Debacle

On Nov. 25, 2022, I ran a blog entry that reported on the severe criticism that then-Toyota-President Akio Toyoda [sic] was receiving for his skepticism that charging infrastructure and consumer preferences were ready for an immediate full switch to electric vehicles. Because he had the courage to keep Toyota focused on hybrids, consumers now have more of what they need and want. As a result Toyota prospers. In a capitalist system, firms run by executives with foresight and courage receive their just reward.

(p. B1) TOKYO—Gasoline-electric vehicles are flying off dealer lots in the U.S. and generating a windfall for the reigning hegemon of hybrids, Toyota Motor.

Toyota on Tuesday [February 6, 2024] forecast a record $30.3 billion net profit for the fiscal year ending March thanks to higher sales of hybrid vehicles in all of its major markets. The results sent Toyota shares up 4.8% in Tokyo to close at a record high.

Hybrid sales grew last year at a faster clip than sales for pure electric vehicles in the U.S. and some other markets. Signs have emerged that the EV push might have gotten ahead of U.S. consumers who are worried about charging problems and higher prices. That has steered them toward less expensive hybrids, which can be filled up with gasoline.

Automakers that had been rushing to pivot toward full EVs are now reconsidering. General Motors said last week it would introduce some plug-in hybrid models in North America after facing pressure from dealers. Ford Motor said last year it would seek to quadruple its hybrid sales in the next five years.

For the full story, see:

River Davis. “Toyota Is Cashing In As Hybrid Sales Boom.” The Wall Street Journal (Wednesday, February 7, 2024): B1-B2.

(Note: bracketed date added.)

(Note: the online version of the story has the date February 6, 2024, and has the title “Toyota Cashes In on Booming Hybrid Sales.”)

Firms Develop Technology to Capture, Liquify, Transport, and Sequester CO2 into “Depleted Offshore Oil-and-Gas Wells”

(p. B4) ATHENS—Ship operators have a radical idea for industrial companies that are searching for ways to dispose of carbon emissions: Take the captured CO2 out to sea and bury it deep under the ocean floor.

But first, supercool the carbon emissions to temperatures so low that they become a liquid.

HD Hyundai Heavy Industries, the world’s largest shipyard, and Greece-based shipowner Capital Product Partners have designed a specialized vessel to carry liquefied CO2. They envision such ships transporting their cargo to depleted offshore oil-and-gas wells, where it would be pumped in and entombed for permanent storage. Capital Product Partners signed a deal for four such ships, to be delivered in 2025 and 2026, that together cost more than $300 million.

“Ships move everything from oil to our furniture, clothes and toothpaste. Now they’ll move our emissions, which is in effect waste management,” said Jerry Kalogiratos, chief executive of U.S.-listed Capital Product Partners, which operates more than 100 cargo vessels.

. . .

“The wells are sealed with a fast drying mix of concrete and sand. If there is a leak inland the gas could end up back in the atmosphere, but there is no conclusive research about what will happen if it escapes in the water,” said Fotis Pagoulatos, a naval engineer in Athens. “The consensus for now is that pollution risk at sea from leaked CO2 is low.”

. . .

While no contracts have been signed, Kalogiratos said Capital Product Partners is in talks with a number of European emitters as well as big energy companies in Japan and South Korea.

For the full story, see:

Costas Paris. “Ship Operators Offer to Bury Emissions.” The Wall Street Journal (Thursday, February 1, 2024): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date January 31, 2024, and has the title “A New Solution for CO2 Emissions: Bury Them at Sea.” The online version of the article says that the title of the print version is “Ship Operators Offer to Bury Emissions” but my copy of the print version has the title “Ship Operators Offer to Bury Emissions at Sea.”)

“Linguistic Diversity Is Precious” Because Languages Are “Natural Experiments” in “Ways of Seeing, Understanding, and Living”

(p. A13) Linguistic variety is “often seen as a problem, the curse of Babel,” but for a linguist, New York City is a riotous collection of living specimens—a “greenhouse, not a graveyard.”  . . .  Mr. Perlin, who has a doctorate in linguistics, helps run the Endangered Language Alliance, which works to document such minority tongues.  . . .

The heart of “Language City” is portraits of individual New York-based speakers. Mr. Perlin writes about their work as well as his, capturing the grind of immigrant life with empathy, balance and wit.  (. . .)  “If the country was rich we would never leave,” says Husniya, a Wakhi speaker from bleak post-Soviet Tajikistan. But she savors the city’s entrepreneurial energy: “New York opened my eyes. It shapes you to be a human being, not dividing based on religion, face, or race, or anything.”

. . .

Wonderfully rich, “Language City” is in part an introduction to the diverse ways different languages work. Seke and other “evidential” languages, for example, have different grammatical forms to indicate how the speaker knows what she’s asserting—whether from observation or inference, hearsay or hunch. Other languages syntactically “tag the speaker’s surprise at unexpected information” or have a special temporal marking “just for things happening today.”

. . .

Yet linguistic diversity is precious, Mr. Perlin stresses, and should be celebrated, not just tolerated.  . . .  . . ., languages “represent thousands of natural experiments” that encode wildly different “ways of seeing, understanding, and living.” Constructed by generations of collective effort, they are invisible cathedrals bigger and more democratic than any building.

For the full review see:

Timothy Farrington. “BOOKSHELF; The Words On the Street.” The Wall Street Journal (Friday, Feb. 23, 2024): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date February 22, 2024, and has the title “BOOKSHELF; ‘Language City’ Review: The Words on the Street.”)

The book under review is:

Perlin, Ross. Language City: The Fight to Preserve Endangered Mother Tongues in New York. Washington, D.C.: Atlantic Monthly Press, 2024.

“Adoption of Singular ‘Gold Standard’ Models” Closes “Off Other Important Avenues of Inquiry”

(p. A15) Ubiquitous and persuasive, models . . . drive decisions—one reason why, in Ms. Thompson’s view, they require our urgent attention. She tells us that, as a graduate student studying North Atlantic storms, she noticed how different models predicted different overall effects and produced contradictory results.

. . .

The problem is that Model Land is easy to enter but difficult to escape. Having built “a beautiful internally consistent model,” Ms. Thompson writes, it can be “emotionally difficult to acknowledge that the initial assumptions on which the whole thing is built are literally not true.”

There are all sorts of ways that models can lead us astray. A small measurement error on an input can lead to wildly inaccurate forecasts—a phenomenon known as the Butterfly Effect. Fortunately, this type of uncertainty is often manageable. Far more problematic are what Ms. Thompson calls “unquantifiable unknowns”—things that are left out of a model’s calculation because they can’t be anticipated, such as the unexpected arrival of a transformative technology or the abrupt collapse of a robust market. It is not always true, she observes, that the data we have now will be relevant to the future—as traders discovered in the stock-market crash of 1987, when their models catastrophically failed.

. . .  We may be inclined to regard models as objective expressions of truth, yet they are deliberately constructed interpretations, imbued with the values and viewpoints of the modelers—primarily, as Ms. Thompson notes, well-educated, middle-class individuals. During the pandemic, models “took more account of harms to some groups of people than others,” resulting in a “moral case” for lockdowns that was “partial and biased.” Modelers who worked from home—while others maintained the supply chain—often overlooked “all of the possible harms” of the actions their models were suggesting.  . . .

The promise and peril of models, Ms. Thompson recognizes, has deep resonance in biomedicine, where so-called model organisms, like yeast and zebrafish, have led to foundational insights and accelerated the development of therapeutics. At the same time, treatments that work brilliantly in Model Land often fail in people, devastating patients and disappointing drug developers. The search for improved disease models can be complicated when proponents of one model suppress research into alternative approaches, as the late journalist Sharon Begley documented in a powerful 2019 report. Ms. Thompson perceptively critiques the adoption of singular “gold standard” models, noting that the “solidification” of one set of assumptions can lock us into one way of thinking and close off other important avenues of inquiry.

For the full review see:

David A. Shaywitz. “BOOKSHELF; Seduced By Numbers.” The Wall Street Journal (Wednesday, Dec. 28, 2022): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date December 27, 2022, and has the title “BOOKSHELF; ‘Escape From Model Land’ Review: Seduced by Numbers.”)

The book under review is:

Thompson, Erica. Escape from Model Land: How Mathematical Models Can Lead Us Astray and What We Can Do About It. New York: Basic Books, 2022.

Sharon Begley’s “powerful” 2019 report, mentioned above, is:

Begley, Sharon. “The Maddening Saga of How an Alzheimer’s ‘Cabal’ Thwarted Progress toward a Cure for Decades.” STAT; Reporting from the Frontiers of Health and Medicine, Posted June 25, 2019. Available from https://www.statnews.com/2019/06/25/alzheimers-cabal-thwarted-progress-toward-cure/.

Miracle Drugs Should Not Lead Us to Ignore Nutrition as a Driver of Health

(p. A15) More than 100 years after the miraculous discovery of insulin to treat diabetes, how are things going? More people are getting the disease. (Between 1959 and 2021, the number of Americans diagnosed with diabetes increased from 1.5 million to 29.7 million, according to federal government surveys.) Patients are doing worse. (Fewer than 1 in 5 Type 1 patients are achieving blood-sugar goals established by the American Diabetes Association.) Diabetes intensifies America’s economic and racial divide. (Type 2 diabetes disproportionately affects the poor, the undereducated and minorities.) And the epidemic is global. (According to the World Health Organization, diabetes is the ninth leading cause of death worldwide.)

If any disease needs to be rethought, it is surely diabetes, and that is the premise of Gary Taubes’s latest book.

. . .

The hero of “Rethinking Diabetes” is Dr. Richard Bernstein, an engineer-turned-doctor who also has Type 1. In the 1970s, he became the first person to use a home glucose meter; looking at his data, he realized that a low-carb diet minimized his glycemic swings. For the past 40 years, in his books, academic papers and other advocacy, he has been the leading low-carb evangelist for people with diabetes.

But Dr. Bernstein is also a controversial figure, and not just because his nutritional guidance defied the medical establishment. I interviewed Dr. Bernstein and wrote about him in 2007. He’s prone to hyperbole and absurdities, such as his claim that insulin-pump patients “all have complications.” More important, his low-carb diet is uncompromising, and his advice is not realistic for everyone. When I interviewed him, he hadn’t eaten an apple since the Nixon administration. Nonetheless, I believe that Dr. Bernstein’s insights about diet and diabetes—and Mr. Taubes’s central argument—are correct. Imperfectly, I follow Dr. Bernstein’s guidance, and I’m far healthier because of it.

Mr. Taubes’s larger point is that we have allowed pharmacological miracles in the treatment of diabetes, insulin being one of them, to supplant food and nutrition as the foundation of good health. He concurs with Dr. Arnoldo Cantani, a 19th-century Italian physician, who said that the remedy for diabetes “is not in the drugstore but in the kitchen.”

For the full review see:

James S. Hirsch. “BOOKSHELF; Beyond Insulin.” The Wall Street Journal (Monday, Jan. 8, 2024): A15.

(Note: ellipsis added.)

(Note: the online version of the review has the date January 7, 2024, and has the title “BOOKSHELF; ‘Rethinking Diabetes’ Review: Beyond Insulin.”)

The book under review is:

Taubes, Gary. Rethinking Diabetes: What Science Reveals About Diet, Insulin, and Successful Treatments. New York: Knopf, 2024.

Zuckerberg Praises Musk for Not Being Too Shy to Reduce Staff at X

(p. R3) At the beginning of the year, many were quick with predictions of X’s demise, in part because of the dramatic staff cuts made by Musk.

. . .

Perhaps the biggest impact of Musk’s staff reductions was provoking a broader conversation about staffing needs and overall productivity throughout Silicon Valley.

Even rival Mark Zuckerberg praised Musk for removing layers of management. “I also think that it was probably good for the industry that he made those changes because my sense is that there were a lot of other people who thought that those were good changes but who may have been a little shy about doing them,” the Facebook co-founder said.

For the full commentary, see:

Tim Higgins. “Elon Musk as Technoking? More Like DramaKing.” The Wall Street Journal (Monday, Dec. 18, 2023): R3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date December 16, 2023, and has the title “In the Year of a DramaKing: Elon Musk.”)

Like Wag Dodge at Mann Gulch, Bob Pardo Knew He Had to “Conceive” an Action Fast

(p. 21) In March 1967, Captain Pardo was on a mission over North Vietnam in an F-4 Phantom when antiaircraft fire hit his plane, inflicting damage, while more badly ripping into the fuel tank of another fighter in the strike force. Both jets pulled away to head home. But the second plane had lost too much fuel to make it to safety. Captain Pardo realized that its two-man crew would be forced to eject over enemy territory and face capture or worse.

Flying beneath the compromised plane, Captain Pardo told its pilot, Capt. Earl Aman, to lower his tailhook — a metal pole at the rear of a fighter used to arrest its landing. At 300 miles per hour, Captain Pardo nudged his plane’s glass windshield against the tip of the pole. For almost 90 miles, he pushed the other plane as both jets hemorrhaged fuel, until they crossed the border with Laos. Both crews ejected by parachute, and all four men were rescued.

. . .

“Pardo’s Push” entered Air Force legend — an extraordinary act of aerial ballet, but one that would never be prescribed in any pilot manuals or flying simulators. Only once before, during the Korean War, was a similar rescue maneuver performed.

The military did not honor Mr. Pardo for decades. It wasn’t until 1989 that he was awarded a Silver Star for gallantry. The citation described him pushing Captain Aman’s aircraft to safety. “The attempt was successful,” it read, “and consequently allowed the crew to avoid becoming prisoners of war.”

. . .

“My dad taught me that when your friend needs help, you help,” he said. “I couldn’t have come home and told him I didn’t even try anything. Because that’s exactly what he would have asked me. He would have said, ‘Did you try?’ So I had to be able to answer that with a yes.”

. . .

Between 1965 and 1968, the U.S. Air Force and Navy carried out an intense bombing campaign of the North, known as Operation Rolling Thunder, to destroy infrastructure. The tonnage of U.S. bombs dropped exceeded American bombing in the Pacific in World War II. North Vietnam’s defenses included antiaircraft batteries, missiles and Russian-made MIG fighter jets.  . . .

Both Captain Pardo’s and Captain Aman’s F-4 fighter-bombers were hit about 40 miles from the steel mill, Captain Pardo recalled in a 2019 interview with The San Antonio Express-News.

. . .

He knew Captain Aman’s plane would not be able to make it out of North Vietnam to rendezvous with a flying refueling tanker. At first, he tried to push Captain Aman’s plane by sticking the nose of his own jet into a rear port, but there was too much turbulence. Next he tried to maneuver directly under the other jet and give it a piggyback ride. That also failed.

Then he conceived of pushing Captain Aman’s tailhook. A tailhook pole was used by the Navy’s version of the F-4 Phantom to land on aircraft carriers. The Air Force used it for emergency runway landings, when the hook snags a cable stretched across tarmac.

For the full obituary, see:

Trip Gabriel. “Bob Pardo, 89, U.S. Pilot Who, With Midair Push, Rescued Another Plane.” The New York Times, First Section (Sunday, December 24, 2023): 21.

(Note: ellipses added.)

(Note: the online version of the obituary was updated Dec. 23, 2023, and has the title “Bob Pardo, Pilot in Daring Vietnam War Rescue, Dies at 89.”)

“Context Switching Is the Mindkiller”

(p. B7) “My mind often feels…like a very wild storm,” Musk said Wednesday in the same interview. “I’m a fountain of ideas. I mean I have more ideas than I could possibly execute. So I have no shortage of ideas. Innovation is not a problem, execution is a problem.”

He was speaking at the New York Times DealBook Summit on Wednesday [Nov. 29, 2023] in New York City, a high-profile event run by one of the media juggernauts he has been openly needling.

He was only there, Musk said, because of his friendship with the host, Andrew Ross Sorkin. Or, as Musk called him on stage, “Jonathan.”

“I’m Andrew,” Sorkin said.

. . .

“Context switching is the mindkiller,” he tweeted the day after Thanksgiving, a favorite axiom of his that mixes a quote from the sci-fi book “Dune” with computer lingo for multitasking.

In “Dune,” fear is the mindkiller—the idea that the primal reaction to fear is to recoil rather than go forward. In essence, fear is an obstacle to be overcome to reach success. For Musk, the challenge to overcome is being able to handle switching between rockets and tweets and cars and brain computers and drilling machines and superhuman artificial intelligence.

. . .

In the moment that ricocheted around the world, Musk told advertisers unhappy with him to go f— themselves, saying he was unwilling to pander to their “blackmail” and warned they threatened to bankrupt the social-media platform he acquired slightly more than a year ago. And if they were successful, he warned, “See how Earth responds to that.”

. . .

To Musk, the likes of Disney are trying to squelch his freedom of speech. To others, they are simply exercising their rights to walk away.

“Go. F—. Yourself,” Musk said on stage to a stunned audience. “Is that clear? I hope it is. Hey, Bob, if you’re in the audience.”

For the full commentary, see:

Tim Higgins. “Storm in Musk’s Mind Casts Shadow on Vehicle Launch.” The Wall Street Journal (Monday, Dec. 4, 2023): B7.

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

(Note: the online version of the commentary has the date December 2, 2023, and has the title “The Storm Brewing Inside Elon Musk’s Mind Gets Out.” The 7th, 8th, and 9th sentences quoted above, appear in the online, but not in the print, version of the commentary. Also, the online version of the sentence on being able to handle switching, contains seven added words of detail.)

The science-fiction Dune book mentioned above is:

Herbert, Frank. Dune. Deluxe ed. New York: Ace, 2019 [1st ed. 1965].

Planners of Megaprojects Almost Always Over-Promise and Under-Deliver

(p. B5) Bent Flyvbjerg is an expert in the planning and management of “megaprojects,” his name for huge efforts that require at least $1 billion of investment: bridges, tunnels, office towers, airports, telescopes and even the Olympics. He’s spent decades wrapping his mind around the many ways megaprojects go wrong and the few ways to get them right, and he summarizes what he’s learned from his research and real-world experience in a new book called “How Big Things Get Done.”

Spoiler alert! Big things get done very badly.

They cost too much. They take too long. They fall too short of expectations too often. This is what Dr. Flyvbjerg calls the Iron Law of Megaprojects: “over budget, over time, under benefits, over and over again.”

The Iron Law of Megaprojects might sound familiar to anyone who has survived a home renovation. But when Dr. Flyvbjerg dug into the numbers, the financial overruns and time delays were more common than he expected. And worse. Much worse.

His seminal work on big projects can be distilled into three pitiful numbers:

• 47.9% are delivered on budget.

• 8.5% are delivered on budget and on time.

• 0.5% are delivered on budget, on time and with the projected benefits.

. . .

Humans are optimistic by nature and underestimate how long it takes to complete future tasks. It doesn’t seem to matter how many times we fall prey to this cognitive bias known as the planning fallacy. We can always ignore our previous mishaps and delude ourselves into believing this time will be different. We’re also subject to the power dynamics and competitive forces that complicate reality, since megaprojects don’t take place in controlled environments, and they are plagued by politics as much as psychology. Take funding, for example. “How do you get funding?” he said. “By making it look good on paper. You underestimate the cost so it looks cheaper, and you underestimate the schedule so it looks like you can do it faster.”

For the full review, see:

Ben Cohen. “SCIENCE OF SUCCESS; 99% of Big Projects Fail. Lego Is the Fix.” The Wall Street Journal (Saturday, February 4, 2023): B5.

(Note: ellipsis added.)

(Note: the online version of the review has the date February 2, 2023, and has the title “SCIENCE OF SUCCESS; 99% of Big Projects Fail. His Fix Starts With Legos.”)

The book under review is:

Flyvbjerg, Bent, and Dan Gardner. How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything in Between. New York: Currency, 2023.

As Freedom Left Hong Kong, So Did Hundreds of Billions of Dollars and 100,000 Citizens

(p. B1) This summer, when Hong Kong’s stock market rout seemed to have no end in sight, the city’s financial chief, Paul Chan, jumped into action, creating a task force to inject confidence into a market that was being pummeled by global investors wary of China.

Hong Kong cut taxes on trading, and Mr. Chan went on a roadshow to Europe and the United States, promising measures to “let investors feel optimistic about the outlook.” Investors were anything but sanguine, however, and the city’s stock exchange is among the world’s worst-performing stock markets this year.

. . .

Hundreds of billions of dollars flowed out this year as money managers and pension funds reduced their holdings in Hong Kong, which has long been a gateway for foreign investors wanting to put money into mainland China. The outflows were largely driven by an economic downturn in China and mounting pressure on American investors to sell their (p. B3) exposure to Chinese companies.

. . .

A former British colony, Hong Kong was handed back to China in 1997 with a pledge that it would maintain a high degree of self-governance under a policy called “one country, two systems.” For two decades, this allowed Hong Kong to define itself as unique and distinct from the rest of China, while offering financial access to the world’s second largest economy.

But after citywide protests in 2019, Beijing imposed the national security law, which has silenced political debate and stifled civic activity.

More than 100,000 residents have left Hong Kong over the last few years, in part because of the security law and tough pandemic restrictions. Many young Hong Kong professionals who are still there have expressed a desire to leave, making it a challenge to recruit the talent that has helped the city function as a financial center.

Once a major hub for Wall Street banks, Hong Kong had a drought of initial public offerings this year. Companies raised the lowest amount of money since 2001, resulting in layoffs at financial institutions citywide.

Many international companies have stopped hiring for new positions in Hong Kong. With less money coming into the exchange and fewer transactions, dozens of brokerages have also closed.

For the full story, see:

Alexandra Stevenson. “Hong Kong Stock Market Ends in Loss For 4th Year.” The New York Times (Saturday, December 30, 2023): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 29, 2023, and has the title “Hong Kong Stocks Plunge to Losses for 4th Straight Year.”)

“To Save the World”

(p. A21) The task of improving the world may seem impossible, but it isn’t. All it takes is the proper sequence of correct discrete decisions. Decisions are just resolutions with teeth.

An editor of mine told me a story from his childhood on his grandparents’ farm in Iowa. The little boy, looking out over acres and acres of corn, asked his grandfather, “How are we going to shuck all that corn?” His grandfather said, “One row at a time.”

. . .

At an event a couple of months ago, someone asked me why I wrote something the way I did, and I found myself blurting out, “To save the world.” It was laughable, preposterous and true.

For the full commentary, see:

Roger Rosenblatt. “Resolve About Something Bigger Than Yourself.” The New York Times (Saturday, December 30, 2023): A21.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Dec. 26, 2023, and has the title “This Year, Make a Resolution About Something Bigger Than Yourself.”)