Entrepreneurship – Page 156 – artdiamondblog.com

Neuroscientist Sees Entrepreneurs as “Never Satisfied” Due to “Attenuated Dopamine Function”

Source of book image: http://www.kurzweilai.net/images/The-Compass-of-Pleasure-Linden-David-J-9780670022588.jpg

David J. Linden is the author of The Compass of Pleasure and a Johns Hopkins University School of Medicine Professor of Neuroscience.

(p. 4) . . . , the psychological profile of a compelling leader — think of tech pioneers like Jeff Bezos, Larry Ellison and Steven P. Jobs — is also that of the compulsive risk-taker, someone with a high degree of novelty-seeking behavior. In short, what we seek in leaders is often the same kind of personality type that is found in addicts, whether they are dependent on gambling, alcohol, sex or drugs.

How can this be? We typically see addicts as weak-willed losers, and chief executives and entrepreneurs are people with discipline and fortitude. To understand this apparent contradiction we need to look under the hood of the brain, and in particular at the functions that relate to pleasure and reward.
. . .
Crucially, genetic variants that suppress dopamine signaling in the pleasure circuit substantially increase pleasure- and novelty-seeking behaviors — their bearers must seek high levels of stimulation to reach the same level of pleasure that others can achieve with more moderate indulgence. Those blunted dopamine receptor variants are associated with substantially increased risk of addiction to a range of substances and behaviors.
. . .
The risk-taking, novelty-seeking and obsessive personality traits often found in addicts can be harnessed to make them very effective in the workplace. For many leaders, it’s not the case that they succeed in spite of their addiction; rather, the same brain wiring and chemistry that make them addicts also confer on them behavioral traits that serve them well.
So, when searching for your organization’s next leader, look for someone with an attenuated dopamine function: someone who is never satisfied with the status quo, someone who wants the feeling of success more than others — but likes it less.

For the full commentary, see:
DAVID J. LINDEN. “Addictive Personality? You Might be a Leader.” The New York Times, SundayReview Section (Sun., July 24, 2011): 4.
(Note: ellipses added.)
(Note: the online version of the commentary is dated July 23, 2011.)

The book mentioned above is:
Linden, David J. The Compass of Pleasure: How Our Brains Make Fatty Foods, Orgasm, Exercise, Marijuana, Generosity, Vodka, Learning, and Gambling Feel So Good. New York: Viking Adult, 2011.

American Gangster as Destructive Entrepreneur

Source of image: http://celebritywonder.ugo.com/wp/Denzel_Washington_in_American_Gangster_Wallpaper_12_1280.jpg

William Baumol famously categorized entrepreneurs as productive, unproductive, or destructive. (Somewhat similarly, Burt Folsom distinguished market entrepreneurs from political entrepreneurs.) Baumol’s view is that we cannot much influence the supply of entrepreneurs, but good policies can increase the percent of entrepreneurs who are productive.
Frank Lucas, at least as portrayed in the 2007 film American Gangster, is an apt example of the destructive entrepreneur. As portrayed by Denzel Washington, the character is intense, willing to take risks, and works hards. There is a scene where Lucas argues that the quality of his product (cocaine) must not be adulterated, because his business depends on his customers knowing that his brand is better than that of competitors. He finds ways of making his supply chain shorter, and his distribution system more trustworthy (by hiring brothers and cousins).
One can easily imagine that with different incentives and constraints, the Denzel Washington character might have brought the world a product that made the world better, rather than worse.

The Baumol article mentioned is:
Baumol, William J. “Entrepreneurship: Productive, Unproductive, and Destructive.” The Journal of Political Economy 98, no. 5, Part 1 (Oct. 1990): 893-921.

The Folsom book mentioned is:
Folsom, Burton W. The Myth of the Robber Barons. 4th ed: Young America’s Foundation, 2003 (1st ed. 1987).

We Tend to Ignore Information that Contradicts Our Beliefs

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

We learn the most when our priors are contradicted. But the dissonance between evidence and beliefs is painful. So we often do not see, or soon forget, evidence that does not fit with our beliefs.
The innovative entrepreneur is often a person who sees and forces herself to remember, the dissonant fact, storing it away to make sense of, or make use of, later. At the start, she may be alone in what she sees and what she remembers. So if we are to benefit from her ability and willingness to bear the pain of dissonance, she must have the freedom to differ, and she must have the financial wherewith-all to support herself until her vision is more widely shared, better understood, and more fruitfully applied.

(p. A13) Beliefs come first; reasons second. That’s the insightful message of “The Believing Brain,” by Michael Shermer, the founder of Skeptic magazine. In the book, he brilliantly lays out what modern cognitive research has to tell us about his subject–namely, that our brains are “belief engines” that naturally “look for and find patterns” and then infuse them with meaning. These meaningful patterns form beliefs that shape our understanding of reality. Our brains tend to seek out information that confirms our beliefs, ignoring information that contradicts them. Mr. Shermer calls this “belief-dependent reality.” The well-worn phrase “seeing is believing” has it backward: Our believing dictates what we’re seeing.
. . .
One of the book’s most enjoyable discussions concerns the politics of belief. Mr. Shermer takes an entertaining look at academic research claiming to prove that conservative beliefs largely result from psychopathologies. He drolly cites survey results showing that 80% of professors in the humanities and social sciences describe themselves as liberals. Could these findings about psychopathological conservative political beliefs possibly be the result of the researchers’ confirmation bias?
As for his own political bias, Mr. Shermer says that he’s “a fiscally conservative civil libertarian.” He is a fan of old-style liberalism, as in liberality of outlook, and cites “The Science of Liberty” author Timothy Ferris’s splendid formulation: “Liberalism and science are methods, not ideologies.” The “scientific solution to the political problem of oppressive governments,” Mr. Shermer says, “is the tried-and-true method of spreading liberal democracy and market capitalism through the open exchange of information, products, and services across porous economic borders.”
But it is science itself that Mr. Shermer most heartily embraces. “The Believing Brain” ends with an engaging history of astronomy that illustrates how the scientific method developed as the only reliable way for us to discover true patterns and true agents at work. Seeing through a telescope, it seems, is believing of the best kind.

For the full review, see:
RONALD BAILEY. “A Trick Of the Mind; Looking for patterns in life and then infusing them with meaning, from alien intervention to federal conspiracy.” The Wall Street Journal (Weds., July 27, 2011): A13.
(Note: ellipsis added.)

Book reviewed:
Shermer, Michael. The Believing Brain: From Ghosts and Gods to Politics and Conspiracies—How We Construct Beliefs and Reinforce Them as Truths. New York: Times Books, 2011.

Lunar Entrepreneurs

(p. A1) Now that the last space shuttle has landed back on Earth, a new generation of space entrepreneurs would like to whip up excitement about the prospect of returning to the Moon.
. . .
(p. A3) “It’s probably the biggest wealth creation opportunity in modern history,” said Barney Pell, a former NASA computer scientist turned entrepreneur and now a co-founder of Moon Express. While Moon Express might initially make money by sending small payloads, the big fortune would come from bringing back platinum and other rare metals, Dr. Pell said.
“Long term, the market is massive, no doubt,” he said. “This is not a question of if. It’s a question of who and when. We hope it’s us and soon.”
Like the aviation prizes that jump-started airplane technology a century ago, the Google Lunar X Prize is meant to rally technologists and entrepreneurs. It is administered by the X Prize Foundation, which handed out $10 million in 2004 to the first private team to build a spacecraft that could carry people 60 miles above the Earth’s surface. (The winner, SpaceShipOne, was built by the aerospace designer Burt Rutan with backing from Paul Allen, the software magnate.)

For the full story, see:
KENNETH CHANG. “In a Private Race to the Moon, Flights of Fancy Are in the Air.” The New York Times (Fri., July 22, 2011): A1 & A3.
(Note: the online version of the story is dated July 21, 2011 and has the title “Race to the Moon Heats Up for Private Firms.”)

“Mystified by an American Disdain for Its Own Business Culture”

“Paul Holland and Molly Davis, producers of a new documentary, “Something Ventured,” that gives an admiring look at innovators and investors from the past.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B3) The film, “Something Ventured,” is a frankly admiring look at those who went out on a limb to back upstarts like Atari, Cisco Systems, Genentech and Apple.
. . .
But the film’s beating heart is captured by Tom Perkins, whose Kleiner Perkins Caufield & Byers company backed the gene-splicing technology of Genentech, among other things. “It’s great if you can make money and change the world for the better at the same time,” said Mr. Perkins, . . .
Other stars of “Something Ventured” include Nolan Bushnell of Atari; Sandy Lerner of Cisco; Jimmy Treybig of Tandem Computers; and a string of venture capitalists, among them Don Valentine, Dick Kramlich, and Arthur Rock.
Many who appear joined dozens of other business people to finance the picture’s roughly $700,000 cost with contributions of a few thousand dollars each, Mr. Holland said.
In becoming involved, several participants said they wanted to rekindle an entrepreneurial spirit that had either waned or changed since the rough-and-tumble years when, by the film’s telling, Atari was started with $250 but needed capital to push Pong, and Mr. Bushnell passed up a chance to own a third of Apple, started by his employee Steve Jobs, for $50,000.
. . .
Mr. Valentine, . . . , said entrepreneurship had not ended — his company was a force behind Google — but it is less often coming from those born in the United States.
“You don’t understand what you have here” is a constant refrain, he said, from Southeast Asian and Indian innovators who are sometimes mystified by an American disdain for its own business culture.

For the full story, see:
MICHAEL CIEPLY . “A Film About Capitalism, and (Surprise) It’s a Love Story.” The New York Times, Week in Review Section (Sun., March 8, 2011): 8.
(Note: ellipses added.)
(Note: the online version of the story is dated March 7, 2011.)

From Inventor to Entrepreneur When No Company Would Distribute Weed Eater

“George Ballas showed off in 1975 the original Weed Eater, a popcorn can rigged up with some wires.” Source of caption and photo: online version of the WSJ obituary quoted and cited below.

(p. A5) George Ballas got his big idea after a poisonous snake bit a worker who was trimming his lawn with shears. The idea turned an old popcorn can, some wires and an edger into the Weed Eater.

Mr. Ballas, who died Saturday at age 85, was a dance instructor, developer, inventor and marketer who built hotels, patented an adjustable table and marketed an early portable phone.
. . .
Mr. Ballas said the idea for the Weed Eater came to him while he was in a car wash, contemplating the big rotating bristles that cleaned hard-to-reach corners yet somehow didn’t scratch the finish.
Drawing from that inspiration, he rigged up an old popcorn can with some wires and hooked it to a rotating edger, and the first string trimmer was born.
. . .
He hired an engineer to design new models that substituted monofilament fishing line for wire and ran on electricity and gas. He dubbed it “Weed Eater” and held several patents on it.
When Mr. Ballas failed to find a company interested in distributing the device, he decided to sell it himself.
. . .
Mr. Ballas also taught entrepreneurship at Rice University in Houston. He continued to tinker with new inventions, and at one point marketed a football-helmet-sized portable phone that found few takers.
“A Weed Eater,” Mr. Ballas told the Houston Chronicle in 1993, “comes along once in a lifetime.”

For the full obituary, see:
STEPHEN MILLER. “REMEMBRANCES; Dance Studio Owner Invented Weed Eater.” The Wall Street Journal (Thurs., JUNE 30, 2011): A5.
(Note: ellipses added.)

The Anecdote for Malignant Perfectionism: “I’ll Fix that in My Next Piece”

“Jeanne Moreau and Orson Welles in ‘Chimes at Midnight,’ a 1965 Shakespeare-based film that’s recently been restored.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. D8) Every great artist, . . . , strives for perfection. In fact, that’s part of what makes them great: They’re never entirely satisfied with anything that they do. The classical pianist Artur Schnabel once remarked that he was only interested in performing music that was “better than it can be performed…unless a piece of music presents a problem to me, a never-ending problem, it doesn’t interest me too much.” This sums up the plight of all serious artists: They lead lives of endless frustration, struggling to reach the top of the hill, then seeing another, higher hill just beyond it.
. . .
Alas, that kind of suffering goes with the territory. The trick, as every artist knows, is not to let it interfere with getting things done. The wisest artists are the ones who finish a new work, walk away and move on to the next project. Whenever a colleague pointed out a “mistake” in one of Dmitri Shostakovich’s compositions, he invariably responded, “Oh, I’ll fix that in my next piece.”
The road to malignant perfectionism, by contrast, starts with chronic indecision. Jerome Robbins, whose inability to make up his mind was legendary throughout the world of dance, was known for choreographing multiple versions of a variation, then waiting until the last possible minute to decide which one to use. Beyond a certain point, this kind of perfectionism is all but impossible to distinguish from unprofessionalism, and Mr. Welles reached that point early in his career. . . .
. . .
Mr. Welles’s problem was that he wanted it both ways. He was a perfectionist who expected his collaborators to sit around endlessly waiting for him to make up his mind–and to pay for all the overtime that he ran up along the way. Simon Callow, his biographer, has summed up this failing in one devastating sentence: “Any form of limitation, obligation, responsibility or enforced duty was intolerable to him, rendering him claustrophobic and destructive.” That’s the wrong kind of perfectionism, and it led, as it usually does, to disaster.

For the full commentary, see:
TERRY TEACHOUT. “The Snare of Perfectionism: When Artists Aim Too High.” The Wall Street Journal (Fri., July 22, 2011): D8.
(Note: ellipsis in Schnabel quote was in original; other ellipses added.)

Occupational Licensing Reduces Job Creation

(p. A15) Only one in 20 workers needed the government’s permission to pursue their chosen occupation in the 1950s, notes University of Minnesota Prof. Morris Kleiner. Today that figure is nearly one in three.
. . .
The breadth of jobs is remarkable. Travel and tourist guides, funeral attendants, home-entertainment installers, florists, makeup artists, even interpreters for the deaf are all regulated by various states. Want to work as an alarm installer? In 35 states, you will need to earn the government’s permission. Are you skilled in handling animals? You will need more than that skill in the 20 states that require a license for animal training.
There’s usually more to these licenses than filling out some paperwork and paying a small fee. Most come with government-dictated educational requirements, examinations, minimum age and grade levels, and other hurdles.
. . .
Instead of looking to the federal government to create jobs, state legislatures could have a real and immediate effect on unemployment in their states by showing how less truly is more. They can remove the barriers to job creation that their predecessors erected and enjoy the job-generating drive of their states’ aspiring entrepreneurs.

For the full commentary, see:
CHIP MELLOR And DICK CARPENTER. “Want Jobs? Cut Local Regulations.” The Wall Street Journal (Thurs., July 28, 2011): A15.
(Note: ellipses added.)

The Movie Auteur as a Model for Technology Entrepreneurship

Source of image: online version of the NYT article quoted and cited below.

(p. 3) Two years ago, the technology blogger John Gruber presented a talk, “The Auteur Theory of Design,” at the Macworld Expo. Mr. Gruber suggested how filmmaking could be a helpful model in guiding creative collaboration in other realms, like software.

The auteur, a film director who both has a distinctive vision for a work and exercises creative control, works with many other creative people. “What the director is doing, nonstop, from the beginning of signing on until the movie is done, is making decisions,” Mr. Gruber said. “And just simply making decisions, one after another, can be a form of art.”
“The quality of any collaborative creative endeavor tends to approach the level of taste of whoever is in charge,” Mr. Gruber pointed out.
Two years after he outlined his theory, it is still a touchstone in design circles for discussing Apple and its rivals.
Garry Tan, designer in residence and a venture partner at Y Combinator, an investor in start-ups, says: “Steve Jobs is not always right–MobileMe would be an example. But we do know that all major design decisions have to pass his muster. That is what an auteur does.”
Mr. Jobs has acquired a reputation as a great designer, Mr. Tan says, not because he personally makes the designs but because “he’s got the eye.” He has also hired classically trained designers like Jonathan Ive. “Design excellence also attracts design talent,” Mr. Tan explains.

For the full story, see:
RANDALL STROSS. “DIGITAL DOMAIN; The Auteur vs. the Committee.” The New York Times, SundayBusiness Section (Sun., July 24, 2011): 3.
(Note: the online version of the story is dated July 23, 2011.)

Edison Excelled as an Organizer of Systems

(p. 131) Where Edison truly excelled was as an organizer of systems. The invention of the light bulb was a wondrous thing but of not much practical use when no one had a socket to plug it into. Edison and his tireless workers had to design and build the entire system from scratch, from power stations to cheap and reliable wiring, to lampstands and switches. Within months Edison had set up no fewer than 334 small electrical plants all over the world; (p. 132) within a year or so his plants were powering thirteen thousand light bulbs. Cannily he put them in places where they would be sure to make maximum impact: on the New York Stock Exchange, in the Palmer House Hotel in Chicago, La Scala opera house in Milan, the dining room of the House of Commons in London. Swan, meanwhile, was still doing much of his manufacturing in his own home. He didn’t, in short, have a lot of vision. Indeed, he didn’t even file for a patent. Edison took out patents everywhere, including in Britain in November 1879, and so secured his preeminence.

Source:
Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

Bill Bryson Slams Thomas Edison Based on Brief Comments in Linda Simon Book

In the passage quoted below, Bill Bryson is strongly critical of Thomas Edison. It’s been many years since I last read a full biography of Edison, but my impression is that Bryson is not being fair to Edison.
I like Bryson and I like Edison, so I was bothered enough to dig out the online “Notes” that Bryson posted to go with his book. On the passage critical of Edison, he cites p. 83 of Linda Simon’s Dark Light book.
It turns out that Simon is a literature professor whose book is mainly about the early fears that superstitious people had about electricity. Many of her sources are literary. The book is a long way from a focused, balanced biography of Edison.
On page 83, she makes a casual and unjustifiedly snide comment on Morgan, Vanderbilt, and especially Gould, and then criticizes Edison by associating him with them. She also criticizes Edison because others sometimes challenged his patents. (Just because lawsuits were brought against Edison, does not imply his patent claims were unsound—anyone can file a lawsuit who is willing to hire a lawyer.)
The “bribe” is apparently that Edison gave some reporters stock, or “suppers or songfests” who had reported favorably. To judge such claims, we would like more evidence and more context. (Today, many institutions hire former reporters to do public relations work. Universities often provide free meals to those whose favor they seek; even book publishers send out free books in the hope that they will be reviewed favorably. Do we count all of these as “bribes”? Are all “rewards” ipso facto “bribes”?)
My view is that if we are going to strongly malign the character of one who brought us so much good (Edison), we should do so based on stronger evidence than the brief casual opinions of Linda Simon.
On my “to do” list is to read a biography or two on Edison. When I do so, I will comment again on this issue.

(p. 130) By 1877, when he started his quest to make a commercially successful light, Edison was already well on his way to becoming known as ‘the Wizard of Menlo Park’. Edison was not a wholly attractive human being. He didn’t scruple to cheat or lie, and was prepared to steal patents or bribe journalists for favourable coverage. In the words of one of his contemporaries, he had ‘a vacuum where his conscience ought to be’. But he was enterprising and hard-working and a peerless organizer.

Source:
Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.