Entrepreneurship – Page 177 – artdiamondblog.com

Media Futures Market Achieves “Astonishing Accuracy”

The passage below is quoted from a WSJ summary of an article that appeared in the July 9-16, 2007 issue of The New Yorker:

(p. B8) The most successful media prediction market is the Hollywood Stock Exchange. According to a study by Harvard Business School professor Anita Elberse, the markets’ forecasts of box-office performance are off by 16% on average. That’s astonishing accuracy for an industry which, despite all kinds of attempts to predict what will work, assumes that the vast majority of its product will fail at the box office.

For the full summary, see:
“The Informed Reader; Marketing; What’s the Next Big Thing? Prediction Markets Answer.” Wall Street Journal (Mon., July 2, 2007): B8.

Entrepreneurial Medicine Hunter Seeks Cures in Ethnobotany

Source of photo: screen capture from slide show on online version of the NYT article quoted and cited below.

(p. C1) Part David Attenborough, part Indiana Jones, Mr. Kilham, an ethnobotanist from Massachusetts who calls himself the Medicine Hunter, has scoured remote jungles and highlands for three decades for plants, oils and extracts that can heal. He has eaten bees and scorpions in China, fired blow guns with Amazonian natives, and learned traditional war dances from Pacific Islanders.
But behind the colorful tales lies the prospect of money, lots of money — for Western pharmaceutical companies, impoverished indigenous tribes and Mr. Kilham.
. . .
(p. C5) In Peru, Mr. Kilham is betting on maca, a small root vegetable that grows here in the central highlands — “a turnip that packs a punch,” he says, adding “it imparts energy, sex drive and stamina like nothing else.”
That view is supported by studies carried out at the International Potato Center, a Lima-based research center that is internationally financed and staffed. Studies there show maca improves stamina, reduces the risk of prostate cancer and increases the motility, volume and quality of sperm.
Some peer reviewed studies published in the journal Reproductive Biology and Endocrinology backed up those findings.
. . .
One product, Maca Stimulant, is sold in Wal-Mart under Mr. Kilham’s Medicine Hunter brand. Mr. Kilham earns a retainer from both Naturex and Enzymatic Therapy, in addition to royalties from another Medicine Hunter-branded product at Wal-Mart.
Mr. Kilham says he earns around $200,000 each year in retainers, and sales are so buoyant he expects to make “in the mid-six figures” in royalties next year.
Mr. Kilham insists he is not in the business simply for financial gain. His motivation comes from promoting herbal medicines and helping traditional communities, he said.
“I have financial security and don’t need to make money from this,” he said. “I believe trade is the best way to get good medicines to the public, to help the environment and to help indigenous people.”
He and Mr. Cam pay growers here in Ninacaca a premium of 6 soles (about $2) for a kilo of maca, almost twice the going rate of 3 to 3.40 soles a kilo. They have set up a computer room at the Chakarunas warehouse and a free dental clinic, the town’s first.
Mr. Kilham is clearly adored by the locals in these desolate, wind-swept villages. On a recent visit here, shamans, maca growers and their families flocked to him. Since only maca and potatoes grow at this altitude, they are thankful Mr. Kilham is helping them sell their produce.

For the full story, see:
ANDREW DOWNIE. “On a Remote Path to Cures.” The New York Times (Tues., January 1, 2008): C1 & C5.
(Note: ellipses added.)
Source of photo: screen capture from slide show on online version of the NYT article quoted and cited above.

Creative Sparks Arise from Opportunistic Innovation

Source of book image:
http://ecx.images-amazon.com/images/I/51vovIVI5sL.jpg

(p. D16) One of the insights of “Strategic Intuition” is that business makes progress by following the opportunistic innovation model, while governments and international-aid agencies aim repetitively at rigid social goals. Such rigidity happens partly for a reason that Mr. Duggan is too polite to mention — bureaucrats, by nature, rarely give off a creative spark. Mr. Duggan prefers to emphasize a structural cause: The public demands solutions to problems of great social importance; thus bureaucrats get stuck with fixed objectives. Yet Mr. Duggan also shows that social progress often happens by emulating the opportunism of business. Among the most powerful of his examples is Muhammad Yunus’s invention of microcredit.
. . .
If there are still businessmen who feel compelled to follow a fixed-goal plan — missing out on the profits of opportunistic flexibility — then at least there is the free market to punish them. Market feedback is surely one big reason that we have so many innovative entrepreneurs. Where the old approach does most of the damage is in social policy, where the feedback is either fuzzy (as in domestic policy) or absent (foreign aid). Social policy could use a lot fewer commencement speakers and a lot more creative sparkers.

For the full review, see:
WILLIAM EASTERLY. “BOOKSHELF; Surprised by Opportunity.” The Wall Street Journal (Weds., November 14, 2007): D16.
(Note: ellipsis added.)

The reference to the Stratetic Intuition book is:
Duggan, William. Strategic Intuition: The Creative Spark in Human Achievement. New York: Columbia University Press, 2007.

Lower Taxes Encourage Entrepreneurship in Ireland

“Feargal Mooney, left, is chief operating officer for Web Reservations International. Ray Nolan is the founder and chief executive officer. Web Reservations provides booking and management for hostels that cater to economy travelers.” Source of the caption and photo: online version of the NYT article quoted and cited below.

(p. C8) DUBLIN — Ireland is now alive with enthusiasm for entrepreneurs, who seemingly rank just below rock stars in popularity.
. . .
The relatively new emphasis on entrepreneurs in Ireland is the culmination of nearly four decades of government policies that have lifted the economy from centuries of poverty to modern prosperity.
The change began when Ireland entered the European Union in 1973. In subsequent years, the government rewrote its tax policies to attract foreign investment by American corporations, made all education free through the university level and changed tax rates and used direct equity investment to encourage Irish people to set up their own businesses.
“The change came in the 1990s,” said James Murphy, founder and managing director of Lifes2Good, a marketer of drugstore products for muscle aches, hair loss and other maladies. “Taxes and interest rates came down, and all of a sudden we believed in ourselves.”
The new environment also encouraged Ray Nolan, who founded Raven Computing in 1989 to provide software for lawyers to keep track of billable hours. He sold that company and founded another that created software for companies to manage billing and receipts. And in 1999, he founded Web Reservations International to provide booking and property management for hostels that cater to backpackers and economy travelers.
“Hostel owners needed to keep track of people sharing rooms, and bookings for Americans coming to Dublin for three nights,” said Feargal Mooney, chief operating officer of Web Reservations. “Hostel accommodations go for 10 to 20 euro a night,” he said, or $15 to $30 at today’s exchange rates, “so booking reservations in them wasn’t profitable for the big travel companies.”

For the full story, see:
JAMES FLANIGAN. “ENTREPRENEURIAL EDGE; Ireland Uses Incentives To Help Start-Ups Flourish.” The New York Times (Thurs., January 17, 2008): C8.

(Note: ellipsis added.)

Mooning the Future

Source of book image:
http://a1055.g.akamai.net/f/1055/1401/5h/images.barnesandnoble.com/images/24530000/24539427.jpg

In an ideal world, a famous railroad mogul like Cornelius Vanderbilt, would be a consistent defender of technological progress. But moguls can differ in their motives and are not always consistent. Consider the following from a new biography of Vanderbilt:

(p. D9) The arrival a few years earlier of the first steamships, clanking loudly and belching flames and smoke, provoked scorn from sailors, who waved their hats in condescension and “sometimes also turned their backs, bent down, and revealed their bare ends to the dignified ladies and gentleman who had paid lofty prices to flirt with the future. Cornelius sometimes made such a salute.”

For the full review, see:
JULIA FLYNN SILER. “The Tides of Fortune.” The Wall Street Journal
(Weds., December 19, 2007): D9.

Why We Need Some Savvy Entrepreneur to Start a Garage-Rating Business

“Henry Schneider found few competent, honest mechanics.” Source of caption and photo: online version of the NYT commentary quoted and cited below.

(p. C1) . . . , Mr. Schneider drove home to Connecticut and undertook a devilish little test.
Over the next few months, he took the Subaru to 40 garages, loosening the battery cable and draining some coolant before each visit. He even wrote himself a script and memorized it, to make sure he was telling every garage the same thing. “We bought the car recently, and we should have had it looked at before we bought it, but we didn’t,” he would say. “It hasn’t started a few times. Can you check that out?” He also asked for a thorough inspection.
Mr. Schneider was trying to answer a question that has occurred to pretty much all drivers who have ever been given the unsettling news that a car needs more repairs than they had expected: Does it really? Or is the garage just looking to make some extra money off me?
. . .
At only 27 of the 40 garages did mechanics tell Mr. Schneider that he had a disconnected battery cable, the very problem to which he had pointed them by saying his car didn’t always start. Only 11 mentioned the low coolant, a problem that can ruin a car’s engine. Ten of the garages, meanwhile, recommended costly repairs that were plainly unnecessary, like replacing the starter motor or the battery. (Tellingly, his results were in line with what the Automobile Protection Association found when it performed its experiments in Canada.)
In all, only about 20 percent of the garages deserved a passing grade. “And that’s with a pretty low bar,” Mr. Schneider told me. “I’m even allowing them to have missed a blown taillight that should have been caught.”
. . .
. . . , Mr. Schneider didn’t set out to study cars. His original goal was to examine the health care system. But he couldn’t very well give himself a heart murmur and then visit 40 cardiologists.
“It turns out it’s hard to get objective measures of people’s bodies,” as Thomas Hubbard, a Northwestern University professor who has also studied the economics of reputation, put it. “It’s a lot easier to get objective measures of people’s cars.”
. . .
Until some savvy entrepreneur starts a garage-rating business, the best solution may be the oldest one: asking for a recommendation from someone who is knowledgeable enough to distinguish between good service and bad. Just remember that a lot of people don’t know quite as much about cars — or their mechanic — as they think they do.

For the full commentary, see:
DAVID LEONHARDT. “ECONOMIC SCENE; When Trust In an Expert Is Unwise.” The New York Times (Weds., November 7, 2007): C1 & C9.

(Note: ellipses added.)

“Schneider sabotaged his dad’s old station wagon to test the honesty of mechanics.” Source of caption and photo: online version of the NYT commentary quoted and cited above.

Co-Working in the Free Agent Nation

“Web entrepreneur Alex Hillman got together with a group of work-at-home businesspeople to create a hip space to work in Philadelphia.” Souce of caption and photo: online version of the Omaha World-Herald article quoted and cited below.

(p. 1D) “I always felt an obligation to the coffee shop. I was taking up precious space,” Hillman said. “I was definitely drinking more coffee than I should have, so I wasn’t sleeping.”

Even before he left his job, he had begun to learn about co-working, not to be confused with job-sharing, where two people take turns in the same stall in the cube farm.

Instead, think of co-working as an entrepreneurial version of parallel play, with owners of their own small businesses working side by side in a drop-in place that looks like a coffee cafe, minus the barista, with all the accoutrements of what’s hip: high ceilings, beer fridge, pool table and Internet access.

Paying as little as $175 a month, they mostly work on their own. But they also trade ideas, help solve problems, and move in and out of loose collaborations.

Today’s technology — wireless access, cell phones, BlackBerries and laptops — makes a mobile work force possible.

“I think when people work at home they have to come up with new ways to interact with people,” said Daniel H. Pink, one of the first authors to write about independent contractors in his 2001 book “Free Agent Nation.”

For the full story, see:

THE PHILADELPHIA INQUIRER. “Workplace; A step up from working in pj’s.” Omaha World-Herald (Monday, September 17, 2007): 1D & 2D.

The refererence to the Pink book is:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

Why Entrepreneurs Are Needed to Bring Important Innovations to Market

Source of book image: http://www.bigbadbookblog.com/wp-content/uploads/Blink.jpg

In my classes I sometimes comment on the failure of much marketing research, sometimes quoting the founder of Sony on using his own judgment on what is useful to customers.

There’s some useful insight into this issue in Malcolm Gladwell’s stimulating Blink book. He argues, and presents examples, that marketing research can provide useful information when the product being evaluated is familiar to the customers being surveyed. But when the product is new and unfamiliar, it may take awhile for the customer to figure out what they think of it. There initial reaction will usually be negative, simply as a reaction to the unfamiliarity. But with time, the product may grow on them as they figure out what “jobs” the product might be able to do for them in the full context of their lives. (The “jobs” formulation is Christensen’s, not Gladwell’s.)

What is worse, it is precisely those innovations that are most innovative, and ultimately prove most useful, that are most unfamiliar, and hence are most likely to be panned by customers in initial evaluations.

This has implications for why an entrepreneur-friendly economy is so important for innovations. Incumbent firms are apt to rely on some formal (a.k.a. marketing research) methods to evaluate new innovations. So if innovations are to be introduced, it is crucial that there be entrepreneurs with the courage, passion, knowledge, and financial means to pursue the innovation through the period of skepticism.

The reference for the Blink book, is:

Gladwell, Malcolm. Blink: The Power of Thinking without Thinking. Back Bay Books, 2005.

The Government’s War on Working Bodega Cats

“Holly scares the rodents away at home, a deli in Williamsburg, Brooklyn.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A28) Across the city, delis and bodegas are a familiar and vital part of the streetscape, modest places where customers can pick up necessities, a container of milk, a can of soup, a loaf of bread.
Amid the goods found in the stores, there is one thing that many owners and employees say they cannot do without: their cats. And it goes beyond cuddly companionship. These cats are workers, tireless and enthusiastic hunters of unwanted vermin, and they typically do a far better job than exterminators and poisons.
When a bodega cat is on the prowl, workers say, rats and mice vanish.
. . .
To store owners, the services of cats are indispensable in a city where the rodent problem is serious enough to be documented in a still popular two-minute video clip on YouTube from late February (youtube.com/watch?v=su0U37w2tws) of rats running amok in a KFC/Taco Bell in Greenwich Village. Store-dwelling cats are so common that there is a Web site, workingclasscats.com, dedicated to telling their tales.
But as efficient as the cats may be, their presence in stores can lead to legal trouble. The city’s health code and state law forbid animals in places where food or beverages are sold for human consumption. Fines range from $300 for a first offense to $2,000 or higher for subsequent offenses.
. . .
In October, a health inspector fined Mr. Martinez $300 and warned him that if Junior was still there by the time of the next inspection he would be fined $2,000.
“He wants me to get rid of the cat, but the rats will take over if I do,” Mr. Martinez said. “I need the cat, and the cat needs a home.”
Because stores do not get advance notification of an inspection, Mr. Martinez is trying to keep Junior in his office as much as possible. Many bodega owners reason that a cat is less of a health threat than an army of nibbling rats. “If cats live in homes and apartments where people have food, a cat shouldn’t be a threat in a store if it’s well maintained,” Mr. Fernández said.

For the full story, see:
KATE HAMMER. “To Dismay Of Inspectors, Prowling Cats Keep Rodents On the Run At City Delis The New York Times (Fri., December 21, 2007): A28.
(Note: ellipses added.)
“Oreo roams at a deli in Greenpoint, Brooklyn.” Source of caption and photo: online version of the NYT article quoted and cited above.

Study Finds Over a Third of Entrepreneurs Are Dyslexic

(p. C1) It has long been known that dyslexics are drawn to running their own businesses, where they can get around their weaknesses in reading and writing and play on their strengths. But a new study of entrepreneurs in the United States suggests that dyslexia is much more common among small-business owners than even the experts had thought.

The report, compiled by Julie Logan, a professor of entrepreneurship at the Cass Business School in London, found that more than a third of the entrepreneurs she had surveyed — 35 percent — identified themselves as dyslexic. The study also concluded that dyslexics were more likely than nondyslexics to delegate authority, to excel in oral communication and problem solving and were twice as likely to own two or more businesses.
“We found that dyslexics who succeed had overcome an awful lot in their lives by developing compensatory skills,” Professor Logan said in an interview. “If you tell your friends and acquaintances that you plan to start a business, you’ll hear over and over, ‘It won’t work. It can’t be done.’ But dyslexics are (p. C6) extraordinarily creative about maneuvering their way around problems.”
. . .
(p. C6) Much has been written about the link between dyslexia and entrepreneurial success. Fortune Magazine, for example, ran a cover story five years ago about dyslexic business leaders, including Richard Branson, founder of Virgin Atlantic Airways; Charles R. Schwab, founder of the discount brokerage firm that bears his name; John T. Chambers, chief executive of Cisco; and Paul Orfalea, founder of the Kinko’s copy chain.
Similarly, Rosalie P. Fink, a professor at Lesley College in Cambridge, Mass., wrote a paper in 1998 on 60 highly accomplished people with dyslexia.
But Professor Logan said hers was the first study that she knew of that tried to measure the percentage of entrepreneurs who have dyslexia. Carl Schramm, president of the Kauffman Foundation, which financed the research, agreed. He said the findings were surprising but, he said, there was no previous baseline to measure it against.

For the full story, see:
BRENT BOWERS. “Tracing Business Acumen to Dyslexia.” The New York Times (Thurs., December 6, 2007): C1 & C6.
(Note: ellipsis added.)

“The No. 1 Need that Poor People Have is a Way to Make More Cash”

Moving water is easier with the 20-gallon rolling drum. Source of photo: online version of the NYT article quoted and cited below.

(p. D3) . . . , the Cooper-Hewitt National Design Museum, . . . , is honoring inventors dedicated to “the other 90 percent,” particularly the billions of people living on less than $2 a day.

Their creations, on display in the museum garden until Sept. 23, have a sort of forehead-thumping “Why didn’t someone think of that before?” quality.

. . .

Interestingly, most of the designers who spoke at the opening of the exhibition spurned the idea of charity.

“The No. 1 need that poor people have is a way to make more cash,” said Martin Fisher, an engineer who founded KickStart, an organization that says it has helped 230,000 people escape poverty. It sells human-powered pumps costing $35 to $95.

Pumping water can help a farmer grow grain in the dry season, when it fetches triple the normal price. Dr. Fisher described customers who had skipped meals for weeks to buy a pump and then earned $1,000 the next year selling vegetables.

For the full story, see:

DONALD G. McNEIL Jr. "Design That Solves Problems for the World’s Poor." The New York Times (Tues., May 29, 2007): D3.

(Note: ellipses added.)

The photo on the left shows a woman safely drinking bacteria-laden water through a filter. The photo on the right shows a "pot-in-pot cooler" that evaporates water from wet sand between the pots, in order to cool what is in the inner pot. Source of photos: online version of the NYT article quoted and cited above.