Entrepreneurship – Page 154 – artdiamondblog.com

A&P Sold Consumers Better and Lower-Priced Food

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

(p. A15) Mr. Levinson’s history centers on the two Hartford sons who followed their father into the business. They would spend their entire working lives at the company being known simply as “Mr. George” and “Mr. John.” Thoughtful and studious, Mr. George’s idea of excitement was a good jigsaw puzzle; Mr. John, somewhat more outgoing, liked the horses but also a daily lunch of milk and crackers. Together the brothers, neither of whom had finished high school, built what would be, for 40 years, the largest retail outlet in the world.

The brothers’ business philosophy was simple, writes Mr. Levinson: “If the company keeps its costs down and prices low, more shoppers would come through its doors, producing more profits than if it kept prices high.” The more stores they could open, the greater the take.
But the Hartfords had a public-relations problem. Since the nation’s earliest days, small family stores had served as community anchors. There were thousands across the country. Mom and pop knew every customer who came through their door; they extended credit to families down on their luck. If low-priced chains drove out such stores, what would happen to small-town America?
In fact, many mom-and-pop operations were inefficiently and incompetently run. A&P might be coldly corporate by comparison, but it offered consumers far more variety and fresher, better-quality goods at less cost to the family budget.

For the full review, see:
PATRICK COOKE. “BOOKSHELF; How a Grocer Bagged Profits; At its peak, the chain had nearly 16,000 stores. Critics charged it with competing unfairly by offering too-low prices.” The Wall Street Journal (Mon., AUGUST 29, 2011): A15.
(Note: ellipsis added.)

The book under review is:
Levinson, Marc. The Great A&P and the Struggle for Small Business in America. New York: Hill and Wang, 2011.

Entrepreneur Sam Walton Sought to Learn from Others

(p. 40) So where is Ames at the time of this writing, in 2008?
Dead. Gone. Never to be heard from again. Wal-Mart is alive and well, #1 on the Fortune 500 with $379 billion in annual revenues.
What happened? What distinguished Wal-Mart from Ames?
A big part of the answer lies in Walton’s deep humility and learning orientation. In the late 1980s, a group of Brazilian investors bought a discount retail chain in South America. After purchasing the company, they figured they’d better learn more about discount retailing, so they sent off letters to about ten CEOs of American retailing companies, asking for a meeting to learn about how to run the new company better. All the (p. 41) CEOs either declined or neglected to respond, except one: Sam Walton.
When the Brazilians deplaned at Bentonville, Arkansas, a kindly, white-haired gentleman approached them, inquiring, “Can I help you?”
“Yes, we’re looking for Sam Walton.”
“That’s me,” said the man. He led them to his pickup truck, and the Brazilians piled in alongside Sam’s dog, Ol’ Roy.
Over the next few days, Walton barraged the Brazilians with question after question about their country, retailing in Latin America, and so on, often while standing at the kitchen sink washing and drying dishes after dinner. Finally, the Brazilians realized, Walton-the founder of what may well become the world’s first trillion-dollar-per-year corporation-sought first
and foremost to learn from them, not the other way around.

Source:
Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.

How Entrepreneurship Rebuilt San Francisco After the Fire

(p. 5) At 5:12 a.m. on April 18, 1906, Amadeo Peter Giannini felt an odd sensation, then a violent one, a slight, almost imperceptible shift in his surroundings coupled with a distant rumble like faraway thunder or a train! Pause. One second. Two seconds. Then-bang!-his house in San Mateo, California, began to pitch and shake, to, fro, up, and down. Seventeen miles north in (p. 6) San Francisco, the ground liquefied underneath hundreds of buildings, while heaving spasms under more solid ground catapulted stones and facades into the streets. Walls collapsed. Gas mains exploded. Fires erupted.

Determined to find out what had happened to his fledgling company, the Bank of Italy, Giannini endured a six-hour odyssey, navigating his way into the city by train and then by foot while people streamed in the opposite direction, fleeing the conflagration. Fires swept toward his offices, and Giannini had to rescue all the imperiled cash sitting in the bank. But criminals roamed through the rubble, prompting the mayor to issue a terse proclamation: “Officers have been authorized by me to KILL any and all persons found engaged in Looting or in the Commission of Any Other Crime.” With the help of two employees, Giannini hid the cash under crates of oranges on two commandeered produce wagons and made a nighttime journey back to San Mateo, where he hid the money in his fireplace. Giannini returned to San Francisco the next morning and found himself at odds with other bankers who wanted to impose up to a six-month moratorium on lending. His response: putting a plank across two barrels right in the middle of a busy pier and opening for business the very next day. “We are going to rebuild San Francisco,” he proclaimed.

Giannini lent to the little guy when the little guy needed it most. In return, the little guy made deposits at Giannini’s bank. As San Francisco moved from chaos to order, from order to growth, from growth to prosperity, Giannini lent more to the little guy, and the little guy banked even more with Giannini. The bank gained momentum, little guy by little guy, loan by loan, deposit by deposit, branch by branch, across California, (p. 7) renaming itself Bank of America along the way. In October 1945, it became the largest commercial bank in the world, overtaking the venerable Chase National Bank. (Note of clarification: in 1998, NationsBank acquired Bank of America and took the name; the Bank of America described here is a different company than NationsBank.)

Source:
Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.

Entrepreneur Julius Blank’s Greatest Pleasure Came from “Building Something from Nothing”

“Fairchild Semiconductor’s founders in 1988. Victor Grinich (left), Jay Last, Jean Hoerni, Julius Blank, Eugene Kleiner, Sheldon Roberts, Robert N. Noyce (seated, left,) and Gordon E. Moore.” Source of caption and photo: online version of the NYT obituary quoted and cited below.

(p. B14) Julius Blank, a mechanical engineer who helped start a computer chip company in the 1950s that became a prototype for high-tech start-ups and a training ground for a generation of Silicon Valley entrepreneurs, died on Saturday in Palo Alto, Calif.. He was 86.
. . .
Mr. Blank and his partners — who included Robert N. Noyce and Gordon E. Moore, the future founders of the Intel Corporation — began their venture as scientist-entrepreneurs in the wake of a mutiny of sorts against their common previous employer, the Nobel Prize-winning physicist William B. Shockley.
Dr. Shockley, . . . , had recruited the eight scientists from around the country in 1956 to work in his own semiconductor lab in nearby Mountain View, Calif.
The group left en masse the next year because of what its members described as Dr. Shockley’s authoritarian management style and their differences with him over his scientific approach. Dr. Shockley called it a betrayal.
Fairchild’s founders came to be branded in the lore of Silicon Valley as the “Traitorous Eight.” How that happened remains something of a mystery.
. . .
When he left Fairchild in 1969 — he was the last of the eight founding partners to depart — Mr. Blank became an investor and consultant to start-up companies and helped found the technology firm Xicor, which was sold in 2004 for $529 million to Intersil.
His former partners, in addition to founding Intel, had started Advanced Micro Devices and National Semiconductor. Mr. Kleiner had founded a venture capital firm that became an early investor in hundreds of technology companies, including Amazon.com, Google and AOL. Still, the greatest pleasure of his working life, Mr. Blank said in a 2008 interview for the archives of the Computer History Museum, a project in Silicon Valley, came with the uncertainty and camaraderie of “the early years, building something from nothing.”
Mr. Blank described a moment in the first days of Fairchild, just before production began in its factory built from nothing, when the ducts and plumbing and air-conditioning were set, and the new crystal growers and one-of-a-kind chip making machines were ready to be installed.
“I remember the day we finally got the floor tile laid,” he said. “And that night, Noyce and the rest of the guys came out and got barefoot and rolled their pants up and were swabbing the floors. I wish I had a picture of that.”

For the full obituary, see:
PAUL VITELLO. “Julius Blank, 86, Dies; Built First Chip Maker.” The New York Times (Fri., September 23, 2011): B14.
(Note: ellipses added.)
(Note: the online version of the obituary is dated September 22, 2011 and had the title “Julius Blank, Who Built First Chip Maker, Dies at 86.”)

May 2011 photo of Julius Blank. Source of photo: online version of the NYT obituary quoted and cited above.

Steve Jobs on Public School System Monopoly

(p. A15) These days everyone is for education reform. The question is which approach is best. I favor the Steve Jobs model.
In 1984 Steve introduced the Mac with a Super Bowl ad. It ran only once. It ran for only one minute. And it shows a female athlete being chased by the helmeted police of some totalitarian regime.
At the climax, the woman rushes up to a large screen where Big Brother is giving a speech. Just as he announces, “We shall prevail,” she hurls her hammer through the screen.
If you ask me what we need to do in education, I would point you to that ad.
. . .
Steve Jobs knew all about competitive markets. He once likened our school system to the old phone monopoly. “I remember,” he said in a 1995 interview, “seeing a bumper sticker with the Bell Logo on it and it said ‘We don’t care. We don’t have to.’ And that’s what a monopoly is. That’s what IBM was in their day. And that’s certainly what the public school system is. They don’t have to care.”
We have to care. In this new century, good is not good enough. Put simply, we must approach education the way Steve Jobs approached every industry he touched. To be willing to blow up what doesn’t work or gets in the way. And to make our bet that if we can engage a child’s imagination, there’s no limit to what he or she can learn.

For the full commentary, see:
RUPERT MURDOCH. “OPINION; The Steve Jobs Model for Education Reform; If we can engage a child’s imagination, there’s no limit to what he or she can learn..” The Wall Street Journal (Sat., OCTOBER 15, 2011): A15.
(Note: ellipsis added.)

Creativity Continues at Disney

“‘We’re kind of like an old married couple,’ said Imagineer Chris Crump, center, of his longtime colleague Larry Nikolai, right. Lisa Girolami, the ride’s producer, is left. It took nearly four years to conceive and build ‘Ariel’s Undersea Adventure,’ which opened at Disney California Adventure Park last week. The trio spearheaded a group of over 100 designers, architects, lighting experts and other specialists.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. C11) It took nearly four years to conceive and build a theme-park ride that put visitors inside the world of “The Little Mermaid,” including several musical numbers, a few key narrative moments and 184 figures from Disney’s animated hit.

And that followed the 18 years it took to settle on an approach to the ride, which was on the entertainment giant’s to-do list almost from the day the film was released in 1989. The ride finally opened last week at Disney California Adventure, Disneyland’s younger neighbor, and takes visitors through a condensed version of the movie’s narrative, cramming nine scenes and four songs into 5½ minutes.
. . .
They start by thinking big: Ms. Girolami described their brainstorming sessions as “an iterative process”–first deciding what parts of the movie to retell, then returning to the drawing table as the decision-making focuses to smaller and smaller details.
Then, helped by “rapid prototyping,” a technology that allows them to generate physical models directly from computer-design files, the group tests and retests their models.
. . .
The Imagineers pride themselves on their never-say-die spirit. “We commit to things creatively that haven’t been done,” Ms. Girolami said. “Someone will say, ‘That’s never been done before,’ and it’s our job to say, ‘Great–let’s do it.’ “

For the full story, see:
Ethan Smith. “CREATING; Taking the Little Mermaid for a Spin.” The Wall Street Journal (Sat., JUNE 4, 2011): C11.
(Note: ellipses added.)

Jobs, Hope and Cash

(p. A15) ‘Ten years ago, Steve Jobs was alive, Bob Hope was alive, Johnny Cash was alive. Now we’re outta jobs, outta hope and outta cash.” I heard that from a TSA agent in New York the other day, as he eyed me for explosives. We laughed, but there was a poignant edge.
Part of the outpouring over Steve Jobs last week was that he was a huge symbol of what seems a lost world of American dynamism. The inventor in his garage changes the world. We’ll not only make the new machine powerful and fast, we’ll make it so beautiful it will make you cry. Like you’re looking at the future, like you’re looking at a baby in its crib.

For the full commentary, see:
PEGGY NOONAN. “DECLARATIONS; This Is No Time for Moderation; America can’t trim and tweak its way back to economic dynamism.” The Wall Street Journal (Sat., OCTOBER 15, 2011): A15.

Berkeley Environmentalist Sticks to Her Knitting

“Avid knitter Shelby Stofle, gathering wool from sheep in Vacaville Calif., hopes to set up a business making scarves and selling them at craft fairs.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A5) Shelby Stofle graduated in December from the University of California at Berkeley with $10,250 in student-loan debt–and no job offers from a dozen applications.

The 24-year-old had hoped to work in environmental conservation or sustainable agriculture but struck out even at a grocery store near her rural hometown of Suisun City, Calif.
. . .
With many employment options exhausted, she said she feels her best shot is to set up her own business, selling her hand-made scarves at craft fairs and farmers’ markets.

For the full story, see:
VAUHINI VARA. “As Jobs Vanish, Sticking to Knitting.” The Wall Street Journal (Mon., OCTOBER 31, 2011): A5.
(Note: ellipsis added.)

For-Profit Entrepreneur Brings Good Things to Bangladesh

“INVENTOR Paul Polak creates cheap and effective devices to help the poor.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D4) If necessity is the mother of invention, Paul Polak is one of its fathers.

For 30 years Dr. Polak, a 78-year-old former psychiatrist, has focused on creating devices that will improve the lives of 2.6 billion people living on less than $2 a day. But, he insists, they must be so cheap and effective that the poor will actually buy them, since charity disappears when donors find new causes.
Inventing a new device is only the beginning, he says; the harder part is finding dependable manufacturers and creating profitable distributorships. The “appropriate technology” field, he argues, is “dominated by tinkerers and short of entrepreneurs.”
His greatest success has been a treadle pump that lets farmers raise groundwater in the dry season, when crops fetch more money. He has sold more than two million, he said.
. . .
Q. What got you interested in poverty?
. . .
Q. And in third-world poverty?
A. My wife’s a Mennonite, and they had programs in Bangladesh. It had hit me between the eyes that homeless people in Denver were living on $500 a month, but there were people overseas living on $30 a month. So I took a trip to Bangladesh.
Some farmers were using hand pumps, but biomechanically, that’s a lousy way to raise water. A Mennonite guy had invented a rower pump that would pull up enough to water a half-acre of vegetables. They had installed 2,000 over five years, and those farmers seemed to be making a lot of money, so I said, “Why don’t we do a project, with an objective of selling 25,000 a year?”
We hit that pretty quickly. One or two Mennonites objected — they considered the idea of selling something to poor people immoral. But we kept at it, and then we found the treadle pump. It was brilliantly simple, it could be manufactured by local workshops, and a local driller could dig a 40-foot well and install it for $25. Studies showed that farmers made $100 in one season on that investment.
We talked to 75 little welding shops where they make things like bedsprings, and jawboned them into making treadle pumps. We went to people who sold things like toilet bowls, and cut a deal with them to be dealers. We trained 3,000 tinkerers to be well-drillers. We hired troubadours to write songs about treadle pumps, and we’d pass out leaflets when they performed. We even produced a 90-minute Bollywood movie.
. . .
Q. What’s the biggest mistake aid agencies make?
A. As we were developing our pump, the World Bank was subsidizing deep-well diesel pumps that could cover 40 acres. The theory was that you’d get a macroeconomic benefit, but it was also very destructive to social justice. The big pumps were handed out by government agents; the government agent was bribeable. The pump would go to the biggest landholder, and he’d become a waterlord.

Q. There have been some well-known failures in this field, like One Laptop Per Child and the Playpump. Can you say why?
A. The laptop was a middle-class device that doesn’t communicate with people who don’t read and write. It cost $100, plus it used the charity model — buy two, give one away. The Playpump, which was a children’s merry-go-round that pumps water, cost $11,000. Women in Africa walk for hours to a well, and then jiggle the pump handle for 60 seconds. This replaces the jiggling. How important is that? And they break. For $11,000, you could dig five wells and eliminate the walk.

Q. What are your principles for success?
A. In 1981, I said, “I’m going to interview 100 $1-a-day families every year, come rain or shine, and learn from them first.”
Over 28 years, I’ve interviewed over 3,000 families. I spend about six hours with each one — walking with them through their fields, asking what they had for breakfast, how far their kids walk to school, what they feed their dog, what all their sources of income are. This is not rocket science. Any businessman knows this: You’ve got to talk to your customers.

For the full story, see:
DONALD G. McNEIL Jr. “A CONVERSATION WITH PAUL R. POLAK; An Entrepreneur Creating Chances at a Better Life.” The New York Times (Tues.,September 27, 2011): D4.
(Note: ellipses added; bold in original.)
(Note: the online version of the article is dated September 26, 2011.)

Haiku Economist Ziliak Praises and Analyzes Jobs Haiku

On 11/8/11 I received a gracious and interesting email from Steve Ziliak praising and analyzing my recent Jobs haiku. Economist Ziliak has written haiku and written about haiku.
He gave me his permission to share his email:

Dear Art,
Congratulations on your prize-winning haiku about the economy! I read all of the haiku selected by the Kauffman Foundation and posted by The Economist. Meaning no disrespect for the hard-working others, Steve Ziliak aka The Haiku Economist agrees that your haiku was the best of the bunch. Pairing jobs-with-Jobs is potentially hazardous to poetry to the point of being country-newspaper corny. But you’ve pulled it off well in a “senryu” thanks to the dead-serious yet softly spoken third line, “innovate to grow”. Thus “jobs” and “Jobs” serve as “cut words” (kiru or kireji), taking us from the literal to the figurative and back again (that is, to innovation, output, and employment). Well done.
Here are a few articles on the theory, Art, and history of haiku economics, which I first developed ten years ago (in 2001) when I was teaching at Georgia Tech:
http://www.poetryfoundation.org/poetrymagazine/article/240970
http://stephentziliak.com/doc/IJPEE0101-0209%20ZILIAK.pdf
http://stephentziliak.com/doc/Ziliak%20Verses%20of%20Economy%201.pdf
http://www.economist.com/blogs/prospero/2011/01/poetry_and_economics
http://www.tandfonline.com/doi/abs/10.1080/08935690500241501#preview
(In 2002 I published “Haiku Economics” in Rethinking Marxism;
this link here is to “Haiku Economics, No. 2”, published in 2005).
And here is a link to my students’ achievements with haiku economics:
http://sites.roosevelt.edu/sziliak/haiku-economics-by-roosevelt-students/
Congrats again, Art, and keep writing!
Things beyond number
all somehow brought to mind by
blossoming cherries.
– Basho
All the best,
Steve aka The Haiku Economist
Stephen T. Ziliak
Trustee and Professor of Economics
Roosevelt University
430 S. Michigan Ave
Chicago, IL 60605
http://sites.roosevelt.edu/sziliak
http://stephentziliak.com

Wozniak Waits 20 Hours to Be First in Line for iPhone 4S; They Say “4S” Means “For Steve”

“Apple co-founder Steve Wozniak uses the voice feature on his new Apple iPhone 4S at the Apple Store in Los Gatos, Calif., on Friday. Wozniak, who created Apple with Steve Jobs in a Silicon Valley garage in 1976, waited 20 hours in line to be the first customer at the store to buy the new iPhone.” Source of caption and photo: online version of the Omaha World-Herald article cited below.