Category: Entrepreneurship

“Let the Consumers Decide When and Where They Want to Eat”

BillowRachelLaCocinita2012-08-13.jpg“Rachel Billow is the co-founder of La Cocinita, a food truck in New Orleans that serves Latin American cuisine. She says the city’s requirement that mobile food vendors change locations after 45 minutes in one spot isn’t feasible. “It takes about a half-hour to set up,” she says.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B8) A street fight is brewing between gourmet food-truck vendors and restaurants–not over the grub, but how it’s sold.

Under pressure to protect bricks-and-mortar restaurants from increased competition, several big cities are starting to apply the brakes on a rising tide of food-truck vendors with fully loaded kitchens.
Boston, Chicago, St. Louis and Seattle are among the cities enacting laws that restrict where food trucks can serve customers in proximity to their rivals and for how long. Some food-truck operators argue that they shouldn’t be punished for offering an innovative service, especially since many cities already allow restaurants to open up alongside one another.
“The rules are unfair,” says Amy Le, owner of Duck N Roll, a food truck in Chicago serving Asian-style cuisine that includes short ribs and mango lychee.
Three weeks after she launched the business last fall, she received a ticket from local law enforcement for doing business about 150 feet from a wine bar–50 feet within the city’s limit for how close food trucks can park outside of retail food establishments.
Ms. Le says she later had to spend nearly a full day in court to find out what the violation would cost her–about $300–and that she lost an estimated $600 to $700 in sales as a result.
“The 200-foot buffer prohibits me from competing,” says Ms. Le, 32 years old, who also opposes a new rule requiring food trucks to install global-positioning devices so the city can track their whereabouts. “It is a free market. Let the consumers decide when and where they want to eat.”
. . .
Gourmet food-truck operators say another problem is that in many cities they are still relegated to antiquated rules intended for ice-cream, hot-dog and other traditional mobile vendors with smaller and less complex menus.
New Orleans, for example, requires mobile food vendors to change locations after 45 minutes in one spot, among other restrictions.
“It’s not a feasible amount of time for this business model,” says 31-year-old Rachel Billow, who last year co-founded La Cocinita, a food truck that serves Latin American cuisine such as plantains and arepas. “It takes about a half-hour to set up.”
Ms. Billow says she and her business partner, Venezuelan chef Benoit Angulo, started La Cocinita after several years of working in the restaurant industry. They invested $50,000 in start-up costs, an amount that included $12,000 in modifications to their vehicle to satisfy the city’s fire code, she adds.

For the full story, see:
SARAH E. NEEDLEMAN. “Street Fight: Food Trucks vs. Restaurants; Some Big Cities Jump Into the Fray, Enacting Parking Restrictions to Cope With Rising Tide of Gourmet Vendors.” The Wall Street Journal (Thurs., August 9, 2012): B8.
(Note: ellipsis added.)

LeAmyDuckNRollTruck2012-08-13.jpg “Amy Le, owner of Duck N Roll, an Asian-style food truck in Chicago, says last fall she received a fine for doing business about 150 feet from a wine bar–50 feet within the city’s limit for how close food trucks can park outside of retail food establishments.” Source of caption and photo: online version of the WSJ article quoted and cited above.

Revolutionary Entrepreneurs Need “Unbridled Confidence and Arrogance”

(p. B1) Will there be another?
It’s a bit absurd to try to identify “the next Steve Jobs.” Two decades ago, Mr. Jobs himself wouldn’t even have qualified. Exiled from Apple Inc., . . . Mr. Jobs was then hoping to revive his struggling computer maker, NeXT Inc. . . .
But just as Mr. Jobs followed Henry Ford and Thomas Edison, there will some day be another innovator with the vision, drive and disdain of the status quo to spark, and then direct, big changes in how we live.
. . .
“You have to try the unreasonable,” says Vinod Khosla, a co-founder of Sun Microsystems Inc., who, as a longtime venture capitalist, has seen thousands of would-be revolutionaries. Two key characteristics, Mr. Khosla says: “unbridled confidence and arrogance.”

For the full story, see:
SCOTT THURM and STU WOO. “Who Will Be the ‘Next Steve Jobs’?” The Wall Street Journal (Sat., October 8, 2011): B1 & B3.
(Note: ellipses added.)

Vivid Examples of Government Obstacles to Entrepreneurship

EconomicFreedom.org/Stories is posting video clips of free agent entrepreneurs and the obstacles that government policies put in the path to their achievements. The videos give concrete examples and make the costs of regulations more real by connecting the costs to the faces of actual people.

“Unknown Unknowns” Will Delay Most Projects

Kahneman’s frequently-used acronym “WYSIATI,” used in the passage quoted below, means “What You See Is All There Is.”

(p. 247) On that long-ago Friday, our curriculum expert made two judgments about the same problem and arrived at very different answers. The inside view is the one that all of us, including Seymour, spontaneously adopted to assess the future of our project. We focused on our specific circumstances and searched for evidence in our own experiences. We had a sketchy plan: we knew how many chapters we were going to write, and we had an idea of how long it had taken us to write the two that we had already done. The more cautious among us probably added a few months to their estimate as a margin of error.

Extrapolating was a mistake. We were forecasting based on the informa-(p. 248)tion in front of us–WYSIATI–but the chapters we wrote first were probably easier than others, and our commitment to the project was probably then at its peak. But the main problem was that we failed to allow for what Donald Rumsfeld famously called the “unknown unknowns:’ There was no way for us to foresee, that day, the succession of events that would cause the project to drag out for so long. The divorces, the illnesses, the crises of coordination with bureaucracies that delayed the work could not be anticipated. Such events not only cause the writing of chapters to slow down, they also produce long periods during which little or no progress is made at all. The same must have been true, of course, for the other teams that Seymour knew about. The members of those teams were also unable to imagine the events that would cause them to spend seven years to finish, or ultimately fail to finish, a project that they evidently had thought was very feasible. Like us, they did not know the odds they were facing. There are many ways for any plan to fail, and although most of them are too improbable to be anticipated, the likelihood that something will go wrong in a big project is high.

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

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

BrandStewart2012-08-05.jpg

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

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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

WealthAndPovertyOfNationsBK2012-07-31.jpg

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”

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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.)