Entrepreneurship – Page 169 – artdiamondblog.com

“The Information in a Message Is Inversely Proportional to Its Probability”

Source of book image: http://www.umcs.maine.edu/~chaitin/

(p. A13) What, exactly, is information? Prior to Shannon, Mr. Gleick notes, the term seemed as hopelessly subjective as “beauty” or “truth.” But in 1948 Shannon, then working for Bell Laboratories, gave information an almost magically precise, quantitative definition: The information in a message is inversely proportional to its probability. Random “noise” is quite uniform; the more surprising a message, the more information it contains. Shannon reduced information to a basic unit called a “bit,” short for binary digit. A bit is a message that represents one of two choices: yes or no, heads or tails, one or zero.

For the full review, see:

JOHN HORGAN. “Little Bits Go a Long Way; The more surprising a message, the more information it contains.” The Wall Street Journal (Tues., March 1, 2011): A13.

Book being reviewed:
Gleick, James. The Information: A History, a Theory, a Flood. New York: Pantheon Books, 2011.

Better Rails Were Needed Before Train Would “Work”

(p. 300) The other weight problem was the one that licked Trevithick at Penydarren: The tracks on which the locomotive ran were just not able to survive the tonnage traveling over them. Driving a five-ton steam locomotive over rails designed for horse-drawn carts was only slightly more sensible than driving a school bus over a bridge made of wet ice cubes. In both cases, it’s a close call whether the vehicle will skid before or after the surface collapses.

. . .
(p. 301) Two years later, Stephenson, in collaboration with the ironmonger William Losh of Newcastle, produced, and in September 1816 jointly patented, a series of’ improvements in wheels, suspension, and–most important–the method by which the rails and “chairs” connected one piece of track to another. Stephenson’s rails seem mundane next to better-known eureka moments, but as much as any other innovation of the day they underline the importance of such micro-inventions in the making of a revolution. For it was the rails that finally made the entire network of devices–engine, linkage, wheel, and track–work.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: ellipsis added.)

How Bacardi Fought Predatory Taxation in Pre-Castro Cuba

Source of book image: http://www.nytimes.com/2008/09/21/business/21shelf.html?_r=1

(p. W6) When it comes to chronicling the Bacardi rum dynasty, the best model may be “Buddenbrooks” or some other novelistic attempt to capture the experience of a family business trying to survive across generations. Tom Gjelten’s “Bacardi and the Long Fight for Cuba” — though fact-driven history and far more upbeat that Thomas Mann’s tale of dynastic decline — feels very much in this literary tradition.
. . .
Perhaps the most fascinating figure in the Bacardi tale is José Bosch, called Pepín, a young businessman who also married into the Bacardi family and was an early opponent of Gerardo Machado’s corrupt rule in the 1920s. Machado made Bacardi, one of Cuba’s most successful companies, a target of predatory taxation, but a proposed rum tax was more than the distiller could stand. Bacardi opened new facilities in Mexico and threatened to move its operations there if the tax was enacted. The Cuban legislature dropped the idea — and Bacardi soon found itself with a Mexican distillery it didn’t need, trying to sell a liquor to tequila- quaffing public that didn’t want it.
Bosch was dispatched in 1933 to shut down the Mexican facility, but instead he saved it. “Noticing that Mexicans drank a lot of Coca-Cola,” Mr. Gjelten writes, Bosch urged the company to promote Bacardi-and-Coke cocktails. Observing the rich tradition of Mexican handicrafts, he also suggested that the locals would be more inclined to drink rum if it was sold in the sort of wicker-covered jugs often used for it in Cuba. Sales in 1934 doubled.

For the full review, see:
ALVARO VARGAS LLOSA. “The Family Spirit.” The Wall Street Journal (Fri., September 12, 2008): W6.
(Note: ellipsis added.)

The book being reviewed, is:
Gjelten, Tom. Bacardi and the Long Fight for Cuba: The Biography of a Cause. New York: Viking Penguin, 2008.

Luther Burbank’s Income Suffered Because His Inventions Could Not Be Patented

“Luther Burbank pollinating poppies in Santa Rosa, Calif.” Source of book image: online version of the NYT review quoted and cited below.

(p. C4) There is a particular type of potato at the heart of Jane S. Smith’s book about Luther Burbank, a man who described himself as an “evoluter of new plants.” Ms. Smith nicknames that potato “the lucky spud.” That turn of phrase is one of many reasons to appreciate “The Garden of Invention,” her colorful, far-reaching book about the genetic, agricultural, economic and legal issues raised by Burbank’s life and legend.
. . .
This book takes more than a passing interest in Burbank’s income, insofar as it reflected his legal ability to protect his scientific advances. In his early professional years he grappled with the doctrine that held that while a gold mine was real property and a machine to extract gold was intellectual property, the actual mineral belonged to anyone who could find it; ditto with potatoes. Throughout his career, even as he developed friendships with tycoons like Ford and Thomas Edison, Burbank lived under constant financial pressure to keep creating new plant products. “His income was entirely dependent on his latest marvel,” Ms. Smith writes

For the full review, see:
JANET MASLIN. “Books of The Times; The Curious Man Lucky Enough to Create ‘the Lucky Spud’.” The New York Times (Mon., May 4, 2009): C4.
(Note: ellipsis added.)
(Note: the online version of the article is dated May 3, 2009.)

The book being reviewed, is:
Smith, Jane S. The Garden of Invention: Luther Burbank and the Business of Breeding Plants. New York: The Penguin Press, 2009.

The Story of Spielberg’s “World-Changing Movies” Deserves “a Detailed, Impassioned and Insightful Telling”

(p. 20) . . . , LaPorte combines tabloid celebrity worship with an older oddity: the incongruous fact that a free market also produces resentment, especially when a competitor like Spielberg demonstrates leadership, superior achievement and undeniable success. He’s one of the few filmmakers still committed to exploring the human condition — and in popular terms. This is what sets him apart and makes him admired, envied and even inscrutable to those who think only in craven terms of business and royalty.

. . .
So it’s a tabloid book. We can only hope it doesn’t become the historical record. LaPorte undermines her research with a headachy repetition of anonymous informants (“one insider,” “one former executive,” “one source”). She concludes that “inherent in all of it was hubris.” But a story this significant, about world-changing movies, doesn’t need homilies. It needs a detailed, impassioned and insightful telling, one that would help us better appreciate a frequently misunderstood, underinterpreted pop artist whose work connects with the public, defines the complexities of human experience and dwarfs most of contemporary Hollywood’s output. DreamWorks calls for a sensitive sociologist — a Tom Wolfe or a Norman Mailer or a Pauline Kael — who can discern the deep, divided heart of Hollywood.

For the full review, see:
ARMOND WHITE. “The Big Picture.” The New York Times Book Review (Sun., July 11, 2010): 20.
(Note: ellipses added.)
(Note: the online version of the review is dated July 9, 2010.)

The book White credibly pans is:
LaPorte, Nicole. The Men Who Would Be King; an Almost Epic Tale of Moguls, Movies, and a Company Called Dreamworks. New York: Houghton Mifflin Harcourt, 2010.

Bloggers See Bad Conditions for Entrepreneurs

The chart above and the one below are from the recently-released results of the First Quarter 2011 influential blogger survey conducted by the Kauffman Foundation. (Tim Kane gave permission to put the charts on my blog.) artdiamondblog.com is one of the blogs included in the survey.

The results above show a perception that conditions are currently tough for entrepreneurs. The chart below displays one of the main reasons: the current economy is perceived as uncertain and fragile. There are many reasons for the uncertainty, but one of them is surely that the bloggers have doubts about the depth of support in government for the institutions and policies upon which entrepreneurship depends (like private property, restrained regulations, and low taxes).

For a full PDF report on the 2011 Q1 survey results, see:
http://www.kauffman.org/uploadedfiles/econ_blogger_outlook_q1_2011.pdf

Salesforce.com Needed More than New Economy Cockiness to Succeed

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

(p. A25) Mr. Benioff tells the story of his success in “Behind the Cloud,” a triumphalist memoir and business self-help manual. He makes it clear that, when he was starting out, he followed the standard dot-com playbook: Get some high-profile tech-industry backers and mentors–Mr. Benioff’s former boss, Oracle chief executive Larry Ellison, was one–create buzz and let the revenues flow in. Salesforce.com might have been launched with New Economy cockiness, but success followed for solid, old-fashioned reasons: The company’s products filled a market gap.

For the full review, see:

JESSICA HODGSON. “Selling and Software; How a start-up found a new way to deliver computer products to salespeople.” The Wall Street Journal (Thurs., DECEMBER 17, 2009): A25.
(Note: the online version of the article is dated DECEMBER 16, 2009.)

The book being reviewed, is:
Benioff, Marc. Behind the Cloud: The Untold Story of How Salesforce.Com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry. San Francisco, CA: Jossey-Bass, 2009.

Mackey Reduced Role in Whole Foods after Being “Drained” by Antitrust Battle

“Higher existing-store sales powered Whole Foods earnings. Above, co-founder John Mackey juggles apples in a New York store last November.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B6) Whole Foods Market Inc. reported Wednesday that fiscal second-quarter profits had more than doubled and raised its full-year earnings forecast. The company also shook up its management team, naming a co-chief executive, though current CEO and co-founder John Mackey said he expects to work “for another decade or so.”
. . .
Mr. Mackey in December resigned as Whole Foods’ chairman after a year of controversy. Last summer, he wrote a controversial opinion article for The Wall Street Journal on his views of health care reform that led to boycotts of the natural grocer by some of his most loyal shoppers. Last spring, the Fair Trade Commission ordered the sale of 37 former Wild Oats Markets Inc. stores, a multi-year battle that Mr. Mackey says left him drained and influenced his decision to appoint Mr. Robb as co-CEO.

For the full story, see:
TIMOTHY W. MARTIN. “Profit Soars at Whole Foods; Grocery Chain Forecasts Sharply Higher Profit, Promotes Two Veteran Executives.” The Wall Street Journal (Thurs., MAY 13, 2010): B6.
(Note: ellipsis added.)
(Note: the first paragraph quoted above has slightly different wording in the online version than the print version; the second paragraph quoted is the same in both.)

Informal Sector Responded Quicker to Quake than Established Companies

“In Port-au-Prince . . . , Haitian vendors peddled small bags of coal.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) PORT-AU-PRINCE, Haiti — The price of candles in the teeming La Saline market here has climbed 60 percent since last week’s earthquake. A box of matches is up 50 percent. A package of Perdue Chicken Franks has gone up 30 percent.
. . .
Haiti’s huge informal sector reacted faster to the quake than did established companies and banks. Outdoor markets like La Saline are already filled with goods from the countryside, including salt, cornmeal, fruits like mangoes and used clothing from the United States.
. . .
“People want candles because they have no electricity or fuel for their generators,” said Manouchka Wendiwou, 21, a vendor in La Saline who raised her candle prices by 60 percent and made no apology for charging what the market would bear.

For the full story, see:

SIMON ROMERO. “Economy in Shock Struggles to Restart.” The New York Times (Fri., January 22, 2010): A10.
(Note: ellipses added.)
(Note: the online version of the article is dated January 21, 2010.)

“Inventors Are Sometimes Beneficiaries of Their Own Ignorance”

William Rosen gives us a thought-provoking anecdote about Edmund Cartwright, the inventor of the first power loom:

(p. 238) He was also, apparently, convinced of the practicality of such a machine by the success of the “Mechanical Turk,” a supposed chess-playing robot that had mystified all of Europe and which had not yet been revealed as one of the era’s great hoaxes: a hollow figurine concealing a human operator. Inventors are sometimes beneficiaries of their own ignorance.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

Federal Regulations Hurt Small Toy Makers

(p. C12) The story begins in 2007, an unusually good year for Peapods Natural Toys and Baby Care, in St. Paul, Minn., and many similar mom-and-pop businesses. Frightened by news that toys made in China contained unsafe levels of lead, customers were looking for alternatives to the usual big-box offerings. Just as organic farmers gain market share whenever there’s a food-safety panic, the lead scare boosted sales of artisanal children’s goods. “People wanted made-in-USA products, and we were the only place in town that had them,” says Dan Marshall, the owner of Peapods.

Vendors offering organic materials and a personal touch seemed poised to prosper. But the short-term boon soon turned into a long-term disaster. In response to the lead panic, Congress passed the Consumer Product Safety Improvement Act, or CPSIA, by an overwhelming majority. The law mandates third-party testing and detailed labels not only for toys but for every single product aimed at children 12 and under.
. . .
Although big companies like Mattel could spread the extra costs over millions of toys, Mr. Marshall’s small-scale suppliers couldn’t. Unable to afford thousands of dollars in testing per product, some went out of business. Others moved production to China to cut costs. Many slashed their product lines, reserving the expensive new tests for only their top sellers. The European companies that used to sell Peapods such specialty items as wooden swords and shields or beeswax-finished cherry-wood rattles simply abandoned the U.S. market. The survivors jacked up prices.

For the full commentary, see:
VIRGINIA POSTREL. “COMMERCE & CULTURE; Small Crafts vs. Big Government.” The Wall Street Journal (Sat., January 29, 2011): C12.
(Note: ellipsis added.)