Category: Entrepreneurship

Steve Jobs Viewed Patents as Protecting Property Rights in Ideas

(p. 512) . . . Apple filed suit against HTC (and, by extension, Android), alleging infringement of twenty of its patents. Among them were patents covering various multi-touch gestures, swipe to open, double-tap to zoom, pinch and expand, and the sensors that determined how a device was being held. As he sat in his house in Palo Alto the week the lawsuit was filed, he became angrier than I had ever seen him:

Our lawsuit is saying, “Google, you fucking ripped off the iPhone, wholesale ripped us off.” Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android, because it’s a stolen product. I’m willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty. Outside of Search, Google’s products–Android, Google Docs–are shit.

A few days after this rant, Jobs got a call from Schmidt, who had resigned from the Apple board the previous summer. He suggested they get together for coffee, and they met at a café in a Palo Alto shopping center. “We spent half the time talking about personal matters, then half the time on his perception that Google had stolen Apple’s user interface designs,” recalled Schmidt. When it came to the latter subject, Jobs did most of the talking. Google had ripped him off, (p. 513) he said in colorful language. “We’ve got you red-handed,” he told Schmidt. “I’m not interested in settling. I don’t want your money. If you offer me $5 billion, I won’t want it. I’ve got plenty of money. I want you to stop using our ideas in Android, that’s all I want.” They resolved nothing.

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.
(Note: ellipsis added.)

Dr. William House “Faced Stern Opposition” to Bring Cochlear Implants to the Deaf

HouseAndHustedFirstCochlearImplant2013-01-12.jpg “Dr. William F. House in 1981 with Tracy Husted, the first pre-school-age child to get a cochlear implant.” Source of caption and photo: online version of the NYT obituary quoted and cited below.

(p. 34) Dr. William F. House, a medical researcher who braved skepticism to invent the cochlear implant, an electronic device considered to be the first to restore a human sense, died on Dec. 7 at his home in Aurora, Ore. He was 89.

. . .
Dr. House pushed against conventional thinking throughout his career. Over the objections of some, he introduced the surgical microscope to ear surgery. Tackling a form of vertigo that doctors had believed was psychosomatic, he developed a surgical procedure that enabled the first American in space to travel to the moon. Peering at the bones of the inner ear, he found enrapturing beauty.
. . .
More than a decade would pass before the Food and Drug Administration approved the cochlear implant, but when it did, in 1984, Mark Novitch, the agency’s deputy commissioner, said, “For the first time a device can, to a degree, replace an organ of the human senses.”
One of Dr. House’s early implant patients, from an experimental trial, wrote to him in 1981 saying, “I no longer live in a world of soundless movement and voiceless faces.”
But for 27 years, Dr. House had faced stern opposition while he was developing the device. Doctors and scientists said it would not work, or not work very well, calling it a cruel hoax on people desperate to hear. Some said he was motivated by the prospect of financial gain. Some criticized him for experimenting on human subjects. Some advocates for the deaf said the device deprived its users of the dignity of their deafness without fully integrating them into the hearing world.
. . .
When his brother returned from West Germany with a surgical microscope, Dr. House saw its potential and adopted it for ear surgery; he is credited with introducing the device to the field. But again there was resistance. As Dr. House wrote in his memoir, “The Struggles of a Medical Innovator: Cochlear Implants and Other Ear Surgeries” (2011), some eye doctors initially criticized his use of a microscope in surgery as reckless and unnecessary for a surgeon with good eyesight.

For the full obituary, see:
DOUGLAS MARTIN. “Dr. William F. House, Inventor of Pioneering Ear-Implant Device, Dies at 89.” The New York Times, First Section (Sun., December 16, 2012): 34.
(Note: ellipses added.)
(Note: the online version of the obituary has the date December 15, 2012.)

Dr. House’s memoir is:
House, William F. The Struggles of a Medical Innovator: Cochlear Implants and Other Ear Surgeries. CreateSpace Independent Publishing Platform, 2011.
(Note: the copyright page of the book gives neither city nor name of publisher; the publisher in the reference is as given by Amazon.com.)

HouseWilliamInventorOfCochlearImplant2013-01-12.jpg

“Dr. William F. House sitting at an operating microscope.” Source of caption and photo: online version of the NYT obituary quoted and cited above.

Rupert Murdoch and Steve Jobs “Hit It Off Well”

(p. 508) Murdoch and Jobs hit it off well enough that Murdoch went to his Palo Alto house for dinner twice more during the next year. Jobs joked that he had to hide the dinner knives on such occasions, because he was afraid that his liberal wife was going to eviscerate Murdoch when (p. 509) he walked in. For his part, Murdoch was reported to have uttered a great line about the organic vegan dishes typically served: “Eating dinner at Steve’s is a great experience, as long as you get out before the local restaurants close.” Alas, when I asked Murdoch if he had ever said that, he didn’t recall it.

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

Is Economics Major Nuts to Have Left Investment Banking?

BravermanJeffreyAndFatherUncleCousinNutBusiness2013-01-12.jpg “Jeffrey Braverman, right, stepped away from Wall Street to join his father, uncle and cousin in the family’s New Jersey nut business.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B8) Ten years ago, Jeffrey Braverman was living the dream of many business school graduates. With a freshly minted bachelor’s degree in economics, he landed a job in 2002 at the Blackstone Group, a Wall Street firm specializing in private equity and investment banking.
Less than a year later, however, Mr. Braverman stepped away from Wall Street and returned to his family’s New Jersey nut business, the Newark Nut Company. It struck some as an odd choice: the family-owned company, which had been started by Mr. Braverman’s grandfather, Sol Braverman (known as Poppy), and had once employed 30 people, was down to two employees and two family members, Mr. Braverman’s father and his uncle.
Located in an indoor mall in a desolate part of Newark, the nut shop’s retail sales were fading and its wholesale business was, at best, stagnant. But Mr. Braverman harbored entrepreneurial ambitions.
At the beginning, he agreed to work with his father and uncle for a salary tied directly to how much new business he attracted. He focused on Internet sales and before long, they began to dwarf the existing business.
Now based in Cranford, N.J., the company has grown to more than 80 employees with more than $20 million in revenue, 95 percent of it online. The following is a condensed version of a recent conversation.
Q. Who leaves investment banking to work at a struggling family nut company?
A. Only someone nuts, right? My dad and my uncle both thought I was crazy. I was making more than they were at the time.
Q. Then why?
A. Have you ever read the book “Monkey Business”? It’s a fairly accurate profile of what it’s like to be in investment banking, at least at a junior level. You know, there’s this economic concept called deadweight loss, and I think a lot of investment banking is like that: it doesn’t really add anything to the world, to the economy. I just wanted to do more.
Q. I assume your father and uncle made you take a pay cut.
A. The one thing I did was, I didn’t want to take anything away from them. I structured it so that my compensation was 100 percent based on incremental profit improvement. So from their perspective, there wasn’t very much risk. I also got a small piece of the business. But at the time the business was worth nothing, book value. No one would have bought it.
Q. Did you have any experience in Internet sales?
A. In 1999, I was a freshman in college and I started our Web site, Nutsonline.com. I spent my second semester of freshman year working on that thing four or five hours a day. It kind of just trickled along. In 1999, very few people were buying from Amazon, so they certainly weren’t going to buy from Nutsonline. In 2000, I remember I set a goal: I wanted to do 10 orders a day.

For the full version of the condensed conversation, see:
IAN MOUNT. “Forsaking Investment Banking to Turn Around a Family Business.” The New York Times (Thurs., April 19, 2012): B8.
(Note: bold in original.)
(Note: the online version of the conversation has the date April 18, 2012.)

BravermanSolNutBusinessEarly1930s2013-01-12.jpg “Sol Braverman, Jeffrey’s grandfather, in the early 1930s.” Source of caption and photo: online version of the NYT article quoted and cited above.

The Project Entrepreneur: Never Say Die

(p. 485) . . . [Jobs] chafed at not being in control, and he sometimes hallucinated or be-(p. 486)came angry. Even when he was barely conscious, his strong personality came through. At one point the pulmonologist tried to put a mask over his face when he was deeply sedated. Jobs ripped it off and mumbled that he hated the design and refused to wear it. Though barely able to speak, he ordered them to bring five different options for the mask and he would pick a design he liked. The doctors looked at Powell, puzzled. She was finally able to distract him so they could put on the mask. He also hated the oxygen monitor they put on his finger. He told them it was ugly and too complex. He suggested ways it could be designed more simply. “He was very attuned to every nuance of the environment and objects around him, and that drained him,” Powell recalled.

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.
(Note: ellipsis and bracketed “Jobs” added.)

David Koch Institute for Integrative Cancer Research

LangerRobertResearchLab2013-01-12.jpg “Dr. Robert Langer’s research lab is at the forefront of moving academic discoveries into the marketplace.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) HOW do you take particles in a test tube, or components in a tiny chip, and turn them into a $100 million company?

Dr. Robert Langer, 64, knows how. Since the 1980s, his Langer Lab at the Massachusetts Institute of Technology has spun out companies whose products treat cancer, diabetes, heart disease and schizophrenia, among other diseases, and even thicken hair.
The Langer Lab is on the front lines of turning discoveries made in the lab into a range of drugs and drug delivery systems. Without this kind of technology transfer, the thinking goes, scientific discoveries might well sit on the shelf, stifling innovation.
A chemical engineer by training, Dr. Langer has helped start 25 companies and has 811 patents, issued or pending, to his name. More than 250 companies have licensed or sublicensed Langer Lab patents.
Polaris Venture Partners, a Boston venture capital firm, has invested $220 million in 18 Langer Lab-inspired businesses. Combined, these businesses have improved the health of many millions of people, says Terry McGuire, co-founder of Polaris.
. . .
(p. 7) Operating from the sixth floor of the David H. Koch Institute for Integrative Cancer Research on the M.I.T. campus in Cambridge, Mass., Dr. Langer’s lab has a research budget of more than $10 million for 2012, coming mostly from federal sources.
. . .
David H. Koch, executive vice president of Koch Industries, the conglomerate based in Wichita, Kan., wrote in an e-mail that “innovation and education have long fueled the world’s most powerful economies, so I can’t think of a better or more natural synergy than the one between academia and industry.” Mr. Koch endowed Dr. Langer’s professorship at M.I.T. and is a graduate of the university.

For the full story, see:
HANNAH SELIGSON. “Hatching Ideas, and Companies, by the Dozens at M.I.T.” The New York Times, SundayBusiness Section (Sun., November 25, 2012): 1 & 7.
(Note: ellipses added.)
(Note: the online version of the story has the date November 24, 2012.)

Apple’s iTunes for Windows Gave “a Glass of Ice Water to Somebody in Hell”

(p. 463) Mossberg wanted the evening joint appearance to be a cordial discussion, not a debate, but that seemed less likely when Jobs unleashed a swipe at Microsoft during a solo interview earlier that day. Asked about the fact that Apple’s iTunes software for Windows computers was extremely popular, Jobs joked, “It’s like giving a glass of ice water to somebody in hell.”
So when it was time for Gates and Jobs to meet in the green room before their joint session that evening, Mossberg was worried. Gates got there first, with his aide Larry Cohen, who had briefed him about Jobs’s remark earlier that day. When Jobs ambled in a few minutes later, he grabbed a bottle of water from the ice bucket and sat down. After a moment or two of silence, Gates said, “So I guess I’m the representative from hell.” He wasn’t smiling. Jobs paused, gave him one of his impish grins, and handed him the ice water. Gates relaxed, and the tension dissipated.

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

The Creation of Consistent, Predictable Dyes and Paints

The-Color-Revolution-by-Regina-Lee-Blaszczyk.png

Source of book image: http://www.kristenlovesdesign.com/wp-content/uploads/2012/09/The-Color-Revolution-by-Regina-Lee-Blaszczyk.png

(p. C12) Few things seem as eternal as color. Yet as Regina Lee Blaszczyk argues, color has a history, a history largely created by business. In “The Color Revolution,” Ms. Blaszczyk shows how the invention of synthetic organic chemistry in the 1850s allowed chemists to create consistent, predictable colors in dyes and paints. Once a chemical company’s magenta was reliable, manufacturers could select it from a color card, order it by mail, and use it to produce dresses and dishware in exactly the promised hue.

For the full review essay, see:
Marc Levinson. “Boardroom Reading of 2012.” The Wall Street Journal (Sat., December 15, 2012): C12.
(Note: the online version of the review essay has the date December 14, 2012.)

The book under review, is:
Blaszczyk, Regina Lee. The Color Revolution, Lemelson Center Studies in Invention and Innovation. Cambridge, MA: The MIT Press, 2012.

Descartes Saw that a Great City Is “an Inventory of the Possible”

(p. 226) Joel Kotkin writes about “The Broken Ladder: The Threat to Upward Mobility in the Global City.” “A great city, wrote Rene Descartes in the 17th Century, represented ‘an inventory of the possible,’ a place where people could create their own futures and lift up their families. In the 21st Century–the first in which the majority of people will live in cities–this unique link between urbanism and upward mobility will become ever more critical.”

Source:
Taylor, Timothy. “Recommendations for Further Reading.” Journal of Economic Perspectives 24, no. 4 (Fall 2010): 219-26.

With iTunes, Apple Leapfrogged CD Burners (a Boat Apple Had Missed)

Is the example sketched below, and in a previous entry, a case of a first mover disadvantage? Or is it simply a case of a lucky or wise bounce-back from a genuine mistake?

(p. 382) . . . [Job’s] angry insistence that the iMac get rid of its tray disk drive and use instead a more elegant slot drive meant that it could not include the first CD burners, which were initially made for the tray format. “We kind of missed the boat on that,” he recalled. “So we needed to catch up real fast.” The mark of an innovative company is not only that it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind.

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.
(Note: ellipsis and bracketed “Job’s” added.)

Apple “Finding a Way to Leapfrog Over Its Competitors”

Isaacson says Jobs wanted two refinements in the iMac. One was new colors. The other is discussed below.
I am not sure what to make of this episode. Is Isaacson suggesting that it was good for Apple that Jobs made a mistake on the type of CD hardware to put in the iMac? That this added constraint “would then force Apple to be imaginative and bold”?
Or is the moral that good people who make a lot of quick decisions, make mistakes, sometimes big mistakes, and that Jobs found a way to bounce back from this one?

(p. 356) There was one other important refinement that Jobs wanted for the iMac: getting rid of that detested CD tray. “I’d seen a slot-load drive on a very high-end Sony stereo,” he said, “so I went to the drive manufacturers and got them to do a slot-load drive for us for the version of the iMac we did nine months later.” Rubinstein tried to argue him out of the change. He predicted that new drives would come along that could burn music onto CDs rather than merely play them, and they would be available in tray form before they were made to work in slots. “If you go to slots, you will always be behind on the technology,” Rubinstein argued.

“I don’t care, that’s what I want,” Jobs snapped back. They were having lunch at a sushi bar in San Francisco, and Jobs insisted that they continue the conversation over a walk. “I want you to do the slot-load drive for me as a personal favor,” Jobs asked. Rubinstein agreed, of course, but he turned out to be right. Panasonic came out with a CD drive that could rip and burn music, and it was available first for computers that had old-fashioned tray loaders. The effects of this (p. 357) would ripple over the next few years: It would cause Apple to be slow in catering to users who wanted to rip and burn their own music, but that would then force
Apple to be imaginative and bold in finding a way to leapfrog over its competitors when Jobs finally realized that he had to get into the music market.

Source:
Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.