Entrepreneurship – Page 147 – artdiamondblog.com

Intuitive Expertise Develops Best When Feedback Is Clear and Fast

(p. 241) Some regularities in the environment are easier to discover and apply than others. Think of how you developed your style of using the brakes on your car. As you were mastering the skill of taking curves, you gradually learned when to let go of the accelerator and when and how hard to use the brakes. Curves differ, and the variability you experienced while learning ensures that you are now ready to brake at the right time and strength for any curve you encounter. The conditions for learning this skill arc ideal, because you receive immediate and unambiguous feedback every time you go around a bend: the mild reward of a comfortable turn or the mild punishment of some difficulty in handling the car if you brake either too hard or not quite hard enough. The situations that face a harbor pilot maneuvering large ships are no less regular, but skill is much more difficult to acquire by sheer experience because of the long delay between actions and their noticeable outcomes. Whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback, as well as on sufficient opportunity to practice.

Source:
Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

Stewart Brand Marvels at Hippie Perfectionist Jobs’ Results

Stewart Brand. Source of photo: online version of the NYT interview quoted and cited below.

(p. 3) Stewart Brand is best known as the editor of the Whole Earth Catalog, a counterculture compendium published twice a year between 1968 and 1972 and the only catalog to win the National Book Award. Its credo, “Stay hungry. Stay foolish,” influenced many of the hippie generation, most notably Steve Jobs.
. . .
READING I’m devouring “Steve Jobs,” by Walter Isaacson. Steve’s life and interests intersected with mine a number of times, so revisiting all that in sequence is like galloping through a version of my own life, plus I get to fill in the parts of his life I wondered about. Take a hippie who is also a driven perfectionist at crafting digital tools, let him become adept at managing corporate power, and marvel at what can result. The book I’m studying line by line, and dog-earing every other page, is Steven Pinker’s “Better Angels of Our Nature.” It chronicles the dramatic decline of violence and cruelty in human affairs in every century. Now that we know that human behavior has been getting constantly gentler and fairer, how do we proceed best with that wind at our backs?

For the full interview, see:
KATE MURPHY, interviewer. “DOWNLOAD; Stewart Brand.” The New York Times, Sunday Review (Sun., Nov. 6, 2011): 3.
(Note: ellipsis added.)
(Note: the online version of the interview has the date November 5, 2011.)

Veterinarians Can Suggest Innovative Hypotheses to Doctors

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

Vets face less government regulation and so are freer to rapidly innovate. They may thus be a promising source of innovative hypotheses for medical doctors.

(p. D2) Cardiologist Barbara Natterson-Horowitz made her first foray into the world of animal medicine when she was asked to treat Spitzbuben, an exceedingly cute emperor tamarin suffering from heart failure.

But first, the veterinarian at the Los Angeles Zoo warned Dr. Natterson-Horowitz: Mere eye contact with the tiny primate could trigger a potentially fatal surge of stress hormones. What she learns from that experience spurs a journey to examine the links between the human and animal condition–and the discovery that the species are closer than she ever imagined.
. . .
The authors recommend that doctors, who often look with disdain on veterinarians, go the next step and collaborate with them in a cross-disciplinary “zoobiquitous” approach–using knowledge about how animals live, die and heal to spark innovative hypothesis for advancing medicine.

For the full review, see:
LAURA LANDRO. “Healthy Reader.” The Wall Street Journal (Tues., June 12, 2012): D2.
(Note: ellipsis added.)
(Note: the online version of the review has the date June 11, 2012.)

The book being reviewed, is:
Natterson-Horowitz, Barbara, and Kathryn Bowers. Zoobiquity: What Animals Can Teach Us About Health and the Science of Healing. New York: Alfred A. Knopf, 2012.

When Is Intuitive Judgment Valid?

(p. 240) If subjective confidence is not to be trusted, how can we evaluate the probable validity of an intuitive judgment? When do judgments reflect true expertise? When do they display an illusion of validity? The answer comes from the two basic conditions for acquiring a skill:

an environment that is sufficiently regular to be predictable

an opportunity to learn these regularities through prolonged practice

When both these conditions are satisfied, intuitions are likely to be skilled. Chess is an extreme example of a regular environment, but bridge and poker also provide robust statistical regularities that can support skill. Physicians, nurses, athletes, and firefighters also face complex but fundamentally orderly situations. The accurate intuitions that Gary Klein has described are due to highly valid cues that the expert’s System 1 has learned to use, even if System 2 has not learned to name them. In contrast, stock pickers and political scientists who make long-term forecasts operate in a zero-validity environment. Their failures reflect the basic unpredictability of the events that they try to forecast.

Source:
Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

Romney Right that Culture Matters for Economic Success

Source of book image: http://photo.goodreads.com/books/1172699090l/209176.jpg

In the piece quoted below, and in much of the TV media coverage, the story is spun as being that Romney offended the Palestinians. But that is not the story. The story is that Romney courageously highlighted an important, but politically incorrect, truth—culture, generally, does matter for economic performance; and Israeli culture, specifically, has encouraged economic growth.
Romney referred to an important book by the distinguished economic historian David Landes. Last school year, one of the students in my Economics of Technology seminar gave a presentation on a related Landes book. That presentation can be viewed at: http://www.amazon.com/review/R2GLBAMFCS5PXH/ref=cm_cr_pr_perm?ie=UTF8&ASIN=0521094186&linkCode=&nodeID=&tag=
I recently read another relevant book, Start-Up Nation, that directly supports Romney’s specific claim, by making the case that Israeli culture is especially congenial to entrepreneurial initiative and success.

(p. A1) JERUSALEM — Mitt Romney offended Palestinian leaders on Monday by suggesting that cultural differences explain why the Israelis are so much more economically successful than Palestinians, thrusting himself again into a volatile issue while on his high-profile overseas trip.
. . .
In the speech, Mr. Romney mentioned books that had influenced his thinking about nations — particularly “The Wealth and Poverty of Nations,” by David S. Landes, which, he said, argues that culture is the defining factor in determining the success of a society.
“Culture makes all the (p. A14) difference,” Mr. Romney said. “And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things.”
He added, “As you come here and you see the G.D.P. per capita, for instance, in Israel, which is about $21,000, and compare that with the G.D.P. per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality. And that is also between other countries that are near or next to each other. Chile and Ecuador, Mexico and the United States.”
The remarks, which vastly understated the disparities between the societies, drew a swift rejoinder from Palestinian leaders.

For the full story, see:
ASHLEY PARKER and RICHARD A. OPPEL Jr. “Romney Trip Raises Sparks at a 2nd Stop.” The New York Times (Tues., July 31, 2012): A1 & A14.
(Note: ellipsis added.)
(Note: the online version of the story has the date July 30, 2012.)

The Landes book discussed by Romney is:
Landes, David S. The Wealth and Poverty of Nations. New York: W.W. Norton & Company, 1998.

The book on Israeli entrepreneurship, that I mention in my comments, is:
Senor, Dan, and Saul Singer. Start-Up Nation: The Story of Israel’s Economic Miracle. hb ed. New York: Twelve, 2009.

Neural Implants “Restored Their Human Functionality”

Ray Kurzweil. Source of photo: online version of the WSJ article quoted and cited below.

(p. C12) Inventor and entrepreneur Ray Kurzweil is a pioneer in artificial intelligence–the principal developer of the first print-to-speech reading machine for the blind, and the first text-to-speech synthesizer, among other breakthroughs. He is also a writer who explores the future of information technology and how it is changing our world.

In a wide-ranging interview, Mr. Kurzweil and The Wall Street Journal’s Alan Murray discussed advances in artificial intelligence, nanotechnology, and what it means to be human. Here are edited excerpts of their conversation:
. . .
MR. MURRAY: What about life expectancy? Is there a limit?
MR. KURZWEIL: No. We’re constantly pushing back life expectancy. Now it’s going to go into high gear because of the inherent exponential progression of information technology. According to my models, within 15 years we’ll be adding more than a year to your remaining life expectancy each year.
MR. MURRAY: So if you play the odds right, you never hit the endpoint.
MR. KURZWEIL: Right. If you can hang in there for another 15 years, we could get to that point.

What Is Human?
MR. MURRAY: What does it mean to be human in a post-2029 world?
MR. KURZWEIL: It’s a slippery slope. But we’ve already gone down that slope. I’ve talked to people who have neural implants in their brain, for Parkinson’s, and I’ve asked them, “Are you still human? Are you less human?”
Generally speaking, they say, “It’s part of me.” And they’re very proud of it, because it restored their human functionality.

For the full interview, see:
Alan Murray, interviewer. “Man or Machine? Ray Kurzweil on how long it will be before computers can do everything the brain can do.” The Wall Street Journal (Fri., June 29, 2012): C12.
(Note: ellipsis added; bold in original.)

Possible Lessons from Steve Jobs’ Entrepreneurial Journey

(p. 4) GOOD IDEAS TAKE TIME After he was ousted from Apple, Mr. Jobs founded NeXT in 1985. It produced a powerful desktop computer, a stylish black cube, and its initial market was going to be in education. The idea was that the machine would be more than hardware and software; it would also offer content, “a universe of wisdom,” recalls Michael Hawley, a computer scientist who worked closely with Mr. Jobs at NeXT and lived part time in Mr. Jobs’s house, as Mr. Hawley shuttled between California and his post at the M.I.T. Media Lab.
NeXT computers, in Mr. Jobs’s vision, would marry technology and the liberal arts by including digital books, music and art. Mr. Jobs began pursuing the rights to works that could be converted to digital form. He persuaded a few publishers that because they would save the expense of paper, printing and distribution, NeXT should pay a royalty that was a fraction of the cost of a printed book. Mr. Jobs, Mr. Hawley recalled, struck a deal with the Oxford University Press for the complete works of Shakespeare for a royalty of $1 a digital copy.
NeXT’s foray into education fizzled; its machines were too expensive for that market. But Mr. Jobs’s concept and business model for digital media were “the instinct that was translated to Apple with the iTunes store, 99-cents-a-song pricing and all the media offerings that have followed,” Mr. Hawley says.
“When Steve believed in an idea, he was both passionate and patient, scratching away over the years until he got it right,” says Mr. Hawley, a scientist, concert pianist and host of the EG Conference, an annual gathering for technologists, educators and people in media and entertainment.
DON’T DWELL ON MISTAKES Steve Capps, a computer scientist, describes creating the Macintosh, which shipped in 1984, as a constant process of making decisions — part experiment and part product development, with steps ahead mixed with many setbacks. “Steve kind of knew what he wanted, but he didn’t precisely,” says Mr. Capps, who designed software for Macintosh.
Mr. Jobs, Mr. Capps remembers, was the arbiter on countless hardware, software and design choices. “His combination of incisiveness and decisiveness, I think, really explained his success,” Mr. Capps says.
Mr. Jobs was also decisive in recognizing mistakes, even when they were his own. For example, he favored one model of a disk drive — for reading computer programs stored on small, removable so-called floppy disks — while other members of the team championed another design. They kept their disk project going surreptitiously. When they showed him the result, he embraced it. “He turned on a dime,” Mr. Capps says. “Don’t dwell on your mistakes. It’s a great lesson.”
PASSION COUNTS FOR A LOT The relentless intensity and total commitment that Mr. Jobs brought to his work, former colleagues and friends agree, had a simple explanation: he genuinely enjoyed what he did and found it worthwhile.
Andy Hertzfeld, a member of original Macintosh team who is now an engineer at Google, says: “The most important thing that I learned from Steve is to always follow your heart. He believed that the only way to do truly great work is to adore what you are doing.”
Mr. Jobs made a lot of money over the years, for himself and for Apple shareholders. But money never seemed to be his principal motivation. One day in the late 1990s, Mr. Jobs and I were walking near his home in Palo Alto. Internet stocks were getting bubbly at the time, and Mr. Jobs spoke of the proliferation of start-ups, with so many young entrepreneurs focused on an “exit strategy,” selling their companies for a quick and hefty profit.
“It’s such a small ambition and sad really,” Mr. Jobs said. “They should want to build something, something that lasts.”

For the full commentary, see:
STEVE LOHR. “The Power of Taking the Big Chance.” The New York Times, SundayBusiness Section (Sun., October 9, 2011): 4.
(Note: bold in original.)
(Note: online version of the commentary is dated October 8, 2011.)
(Note: the same title, on the same page, was used as heading for two different articles on Steve Jobs–Lohr’s on the left side, and Stross’ on the right side.)

Edison Was Great Inventor; “Jobs Was the Far Shrewder Businessman”

“Thomas Alva Edison.” Source of caption and photo: online version of the NYT article quoted and cited below.

I have not read Stross’ books on Jobs and Edison. According to some of the Amazon reviews of the Jobs book, back in 1993 Stross was much more critical of Jobs than he is in the piece below:

(p. 4) I wrote a book about Mr. Jobs in 1993.
. . .
Years later, I wrote a biography of Edison, a person whom Mr. Jobs admired. When you compare the two personalities and their careers, a few similarities emerge immediately. Both had less formal schooling than most of their respective peers. Both possessed the ability to visualize projects on a grand scale. Both followed an inner voice when making decisions. And both had terrific tempers that could make their employees quake.
. . .
Mr. Jobs was the far shrewder businessman, even if he never talked about wealth as a matter of personal interest. When Edison died, he left behind an estate valued at about $12 million, or about $180 million in today’s dollars. His friend Henry Ford had once joked that Edison was “the world’s greatest inventor and the world’s worst businessman.” Mr. Jobs was worth a commanding $6.5 billion.
Mr. Jobs was perhaps the most beloved billionaire the world has ever known. Richard Branson’s tribute captures the way people felt they could identify with Mr. Jobs’s life narrative: “So many people drew courage from Steve and related to his life story: adoptees, college dropouts, struggling entrepreneurs, ousted business leaders figuring out how to make a difference in the world, and people fighting debilitating illness. We have all been there in some way and can see a bit of ourselves in his personal and professional successes and struggles.”

For the full commentary, see:
RANDALL STROSS. “The Power of Taking the Big Chance.” The New York Times, SundayBusiness Section (Sun., October 9, 2011): 4.
(Note: online version of the commentary is dated October 8, 2011, and has the title “The Wizard and the Mortal: Two Sides of Genius.”)
(Note: in the print version, the same title, on the same page, was used as heading for two different articles on Steve Jobs–Lohr’s on the left side, and Stross’ on the right side.)

Stross’ books on Jobs and Edison are:
Stross, Randall E. Steve Jobs & the Next Big Thing. New York: Scribner Publishers, 1993.
Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.

Technology Allows Start-Ups to Launch with Fewer Employees

“Start-up BiteHunter launched with three employees. Above, co-founders Gil Harel, left, and Ido Shilon.” Source of caption and photo: online version of the WSJ article quoted and cited below.

Lower costs to entry means more start-ups and that means more innovation, ceteris paribus. All good. For the labor market, there will be fewer initial jobs per start-up. But there will be more start-ups, and more opportunity for erstwhile laborers to themselves become entrepreneurs. So maybe still all good.

(p. B5) New businesses are getting off the ground with nearly half as many workers as they did a decade ago, as the spread of online tools and other resources enables start-ups to do more with less.

The change, which began before the recession, may be permanent, according to some analysts.
. . .
Rather than purchasing the tools and manpower needed to run their companies, more small firms are renting, sharing or outsourcing resources, typically through online services, according to Steve King, a partner at Emergent Research, a research and consulting firm for small businesses.
. . .
Last year, Gil Harel launched BiteHunter, a search engine for restaurant discounts, with just three employees. Based in New York, the site used shared screens and other communications tools to work with developers in Russia, Uruguay and Israel.
“Just to build the infrastructure to get a business off the ground used to take a lot of money and people. But things that you couldn’t do in the past, you can now do on your own,” Mr. Harel says.

For the full story, see:
ANGUS LOTEN. “With New Technology, Start-Ups Go Lean; Web-Based Services Mean Fewer Workers Needed.” The Wall Street Journal (Thurs., September 15, 2011): B5.
(Note: ellipses added.)

Innovation Depends Less on R&D Spending and More on “Talent, Process, Execution and Strategy”

(p. B1) In the world of R&D spending, more doesn’t necessarily mean better. And R&D may not describe all the innovation that matters.
“I think the numbers are pretty useless,” says Michael Schrage, a research fellow at MIT’s Sloan School who has studied the subject. “What matters more is the kind of innovator you are. If it were really true that the people who spent the most on R&D were the most successful, we wouldn’t be subsidizing General Motors .”
“There’s no statistically significant relationship between how much a company spends on R&D and how they perform over time,” adds Barry Jaruzelski of Booz & Co. “There’s a set of people who just consistently seem to skin the cat better.”
. . .
(p. B2) Booz & Co. in 2007 listed the biggest global corporate spenders of R&D. The top 10 were Toyota, Pfizer, Ford, Johnson & Johnson, DaimlerChrysler, General Motors, Microsoft, GlaxoSmithKline, Siemens and IBM.
Then it drew up a second list, a group of companies it called “high-leverage innovators” that returned the best financial performance for every dollar spent on R&D. Booz screened for companies that, over the five previous years, outperformed industry peers across seven measures–including profit, sales growth, and shareholder return–while also spending less on R&D as a percentage of sales than the median in their industries.
No company from the first list made the second list. (Winners included Adidas, Apple, Exxon, Google, Kobe Steel, Samsung and Tenneco.)
That disconnect essentially hasn’t changed, says Mr. Jaruzelski. Winning at innovation “is all about talent, process, execution and strategy,” he says. “That’s given the U.S. a pretty strong advantage over time.”
“Technology,” he adds, “is not equal to innovation.”

For the full commentary, see:
JOHN BUSSEY. “THE BUSINESS; Myths of the Big R&D Budget.” The Wall Street Journal (Fri., June 15, 2012): B1-B2.
(Note: ellipsis added.)

Larry Page on Tesla, Commerce, and Changing the World

Funding is a key constraint for the innovative project entrepreneur. By “project entrepreneur” I mean the innovator who views money as a means to achieving the project, and not as an end in itself. In this brief clip from Page’s 2007 AAAS talk, he discusses how as a 12 year-old reading Tesla’s autobiography he almost cried at how Tesla’s failure to commercialize his ideas limited his ability to change the world.

The Tesla autobiography is:
Tesla, Nikola. My Inventions: The Autobiography of Nikola Tesla. SoHo Books, 2012.