Entrepreneurship – Page 183 – artdiamondblog.com

The Importance of Entrepreneurial Innovation

The U.S. in the midst of the most entrepreneurial era in its history, with more than 500,000 Americans involved in launching their own companies each year and an estimated 10% to 15% of all working adults engaged in some kind of entrepreneurial activity. And among these entrepreneurs, it is the innovators who matter most.

Their enterprises are the ones which create the jobs and industries of the future — as they have lifted the economy’s productivity in the past. The automobile, the airplane, the telephone, air conditioning, the personal computer and its software, and Internet search engines — all were launched by innovative entrepreneurs rather than large companies.

For the full commentary, see:

ROBERT E. LITAN. "Innovators Matter Most." The Wall Street Journal (Sat., February 24, 2007): A8.

Entrepreneur Bets on Nuclear Power Revival

Entrepreneur Kyle Kimmerle at one of his 600 uranium claims. Source of photo: online version of the NYT article quoted and cited below.

Kyle Kimmerle is an entrepreneur, risking his own money. If he guesses right, he will make himself rich, by helping provide the fuel needed for generating electricity for us.

(p. C1) . . . Prices for processed uranium ore, also called U308, or yellowcake, are rising rapidly. Yellowcake is trading at $90 a pound, nearing the record high, adjusted for inflation, of about $120 in the mid-1970s. The price (p. C4) has more than doubled in the last six months alone. As recently as late 2002, it was below $10.

A string of natural disasters, notably flooding of large mines in Canada and Australia, has set off the most recent spike. Hedge funds and other institutional investors, who began buying up uranium in late 2004 to exploit the volatility in this relatively small market, have accelerated the price rally.

But the more fundamental causes of the uninterrupted ascendance of prices since 2003 can be traced to inventory constraints among power companies and a drying up of the excess supply of uranium from old Soviet-era nuclear weapons that was converted to use in power plants. Add in to those factors the expected surge in demand from China, India, Russia and a few other countries for new nuclear power plants to fuel their growing economies.

“I’d call it lucky timing,” said David Miller, a Wyoming legislator and president of the Strathmore Mineral Corporation, a uranium development firm. “Three relatively independent factors — dwindling supplies of inventory, low overall production from the handful of uranium miners that survived the 25-year drought and rising concerns about global warming — all have coincided to drive the current uranium price higher by more than 1,000 percent since 2001.”

. . .

. . . “We won’t build a new plant knowing there’s nowhere to put the used fuel,” Mr. Malone of Exelon said. “We won’t build one without community support, and we won’t build until market conditions are in place where it makes sense.”

But that is not holding back Kyle Kimmerle, owner of the Kimmerle Funeral Home in Moab. Mr. Kimmerle, 30, spent summers during his childhood camping and working at several of his father’s mines in the area. In his spare time he has amassed more than 600 uranium claims throughout the once-productive Colorado Plateau.

“My guess is that next year my name won’t be on the sign of this funeral home anymore and I’ll be out at the mines,” he said.

He recently struck a deal with a company to lease 111 of his claims for development. The company, new to uranium mining, has pledged $500,000 a year for five years to improve the properties. Mr. Kimmerle will receive annual payments plus royalties for any uranium mined from the area.

For the full story, see:

SUSAN MORAN and ANNE RAUP. "A Rush for Uranium; Mines in the West Reopen as Ore Prices Reach Highs of the 1970s." The New York Times (Weds., March 28, 2007): C1 & C4.

(Note: ellipses added.)

Yellowcake, which is processed uranium, is in the third jar from the left of the top photo. The photo below it is of old equipment at a dormant uranium mine. Source of the photos and the graphic: online version of the NYT article quoted and cited above.

Google Hires “Interesting” “Geniuses” & Provides Them a Workplace Where Interesting Geniuses Want to Be

A break lounge at Google’s Manhattan offices. Source of photo: online version of the NYT article cited below.

You could be forgiven for not knowing that a satellite Google campus is growing in downtown Manhattan. There is no Google sign on the building, and it’s hard to catch a glimpse of a Googler, as employees call themselves, on the street because the company gives them every reason to stay within its candy-colored walls.

From lava lamps to abacuses to cork coffee tables, the offices may as well be a Montessori school conceived to cater to the needs of future science-project winners.

. . .

“These are power geniuses,” said Jane Risen, a statuesque brunette who works in training for the sales staff and is considered among the best dressed on campus — she was wearing a brown blazer from the Gap. “If they don’t have the same social skill or style sense, they’re extremely interesting people or else they don’t get hired.”

. . .

The strategy of keeping employees happy and committed to spending endless hours on campus seems to be working. Richard Burdon, 37, an engineer who joined Google two years ago, has been staying past midnight to prepare for the introduction of a project. (Google’s Manhattan engineers have been responsible for developing Google Maps and are working on some 100 other projects.)

“Google is about as interesting as starting your own startup because you can really follow your own ideas,” said Mr. Burdon, who previously worked for Goldman Sachs, Sony and I.B.M. The only time he could remember leaving the office during the workday was to buy a friend a birthday present.

For the full story, see:

DEBORAH SCHOENEMAN. "Can Google Come Out to Play?" The New York Times (December 31, 2006).

(Note: ellipses added.)

Work and non-work at Google’s Manhattan offices. Source of photos: online version of the NYT article cited above.

Google Co-Founder Sergey Brin “Really Enjoyed the Montessori Method”

Source for the image of the Moment issue cover, on left: http://www.momentmag.com/issue/index.html Source for the image of the first page of the article, on right: online version of the Moment article cited below.

Sergey, who turned six that summer, remembers what followed as simply “unsettling”—literally so. “We were in different places from day to day,” he says. The journey was a blur. First Vienna, where the family was met by representatives of HIAS, the Hebrew Immigrant Aid Society, which helped thousands of Eastern European Jews establish new lives in the free world. Then, on to the suburbs of Paris, where Michael’s “unofficial” Jewish Ph.D. advisor, Anatole Katok, had arranged a temporary research position for him at the Institut des Hautes Etudes Scientifiques. Katok, who had emigrated the year before with his family, looked after the Brins and paved the way for Michael to teach at Maryland.

When the family finally landed in America on October 25, they were met at New York’s Kennedy Airport by friends from Moscow. Sergey’s first memory of the United States was of sitting in the backseat of the car, amazed at all the giant automobiles on the highway as their hosts drove them home to Long Island.

The Brins found a house to rent in Maryland—a simple, cinder-block structure in a lower-middle-class neighborhood not far from the university campus. With a $2,000 loan from the Jewish community, they bought a 1973 Ford Maverick. And, at Katok’s suggestion, they enrolled Sergey in Paint Branch Montessori School in Adelphi, Maryland.

He struggled to adjust. Bright-eyed and bashful, with only a rudimentary knowledge of English, Sergey spoke with a heavy accent when he started school. “It was a difficult year for him, the first year,” recalls Genia. “We were constantly discussing the fact we had been told that children are like sponges, that they immediately grasp the language and have no problem, and that wasn’t the case.”

Patty Barshay, the school’s director, became a friend and mentor to Sergey and his parents. She invited them to a party at her house that first December (“a bunch of Jewish people with nothing to do on Christmas Day”) and wound up teaching Genia how to drive. Everywhere they turned, there was so much to take in. “I remember them inviting me over for dinner one day,” Barshay says, “and I asked Genia, ‘What kind of meat is this?’ She had no idea. They had never seen so much meat” as American supermarkets offer.

When I ask about her former pupil, Barshay lights up, obviously proud of Sergey’s achievements. “Sergey wasn’t a particularly outgoing child,” she says, “but he always had the self-confidence to pursue what he had his mind set on.”

He gravitated toward puzzles, maps and math games that taught multiplication. “I really enjoyed the Montessori method,” he tells me. “I could grow at my own pace.” He adds that the Montessori environment—which gives students the freedom to choose activities that suit their interests—helped foster his creativity.

“He was interested in everything,” Barshay says, but adds, “I never thought he was any brighter than anyone else.”

For the full story, see:

Mark Malseed. "The Story of Sergey Brin; How the Moscow-born entrepreneur cofounded and changed the way the world searches." Moment Magazine (February 2007).

More Retirees Choosing to Become Entrepreneurs

Call them silver entrepreneurs or senior entrepreneurs or third-age entrepreneurs. They are people who do not want — or are not financially able — to idle away their retirement years and, instead, opt to start a business.

. . .

The numbers of retired people rejecting the unfettered leisure that has been the American model since the 1940’s in favor of starting up a small business are not exact. Federal government data suggests there are now at least three million entrepreneurs who are 55 and over — up one-third from the number counted in 2000.

”It’s like this sea swell that has been under the radar,” said Linda Wiener, the aging issues expert for Monster.com, the jobs search Web site. ”There are people who don’t want to work an hourly job, and are wondering what are they going to do for the next 30 years?”

A majority of 800 workers surveyed last year for the John J. Heldrich Center for Workforce Development at Rutgers University indicated in their responses that traditional retirement was obsolete. Two-thirds expect to work after 55, and about 15 percent wanted to start their own business after they retired, the survey found.

For the full story, see:

Elizabeth Olson. "Small Business; In Life’s Second Act, Some Take On A New Role: Entrepreneur." The New York Times (Thurs., September 28, 2006): C6.

(Note: ellipsis added.)

Beautiful Downtown Burbank, Runs Amok

Cultural history background for the young: at the beginning of every installment of the "Rowan and Martin Laugh-In" TV comedy review (circa 1968-1973), someone would sarcastically intone that the show was being broadcast from "beautiful downtown Burbank."

Excerpted below is Daniel Pink’s incredible conversation with a Burbank city clerk:

(p. 199) What led me to this 100,000-person city in California’s San Fernando Valley—past the fish fountains, to the steps of City Hall—was a rumor I’d heard that Burbank puts free agents in jail.

. . .

(p. 200) After fifteen minutes of probing, here’s the gist of what he tells me: If I want to write from a home office in Burbank, I first must apply for a home occupation license. The city would examine my application, and then come to my house to inspect the office from which I intended to work. Once the inspector deemed my home office safe for writing and unthreatening to my neighbors, I could begin earning a living, my workplace now officially blessed by the city.

But that was only the beginning. I’d have to pay a special tax. And I’d have to abide by the strictures of Burbank Municipal Code Section 31-672—which, among other things, said: My office couldn’t be larger than four hundred square feet or 20 percent of my home’s square footage. I couldn’t put my home office in a "garage, carport, or any other area required or designated for the parking of vehicles." The only "materials, equipment, and/or tools" I could use to do my work were things used by "a normal household." I couldn’t use my home office to repair cars, sell guns, or operate a kennel. And the only folks who could ever work with me in the office were people who lived with me.

That last provision alarmed me.

Pointing to Section 31-672(c), I ask, "Does this mean I can’t have a meeting at my house?"

"Yep," says the clerk. "You’d have to somewhere else."

"Let me get this straight," I say. "Let’s say I’m a writer collaborating on a screenplay. If my collaborator comes over and we work on the screenplay together, that’s against the law? It’s a misdemeanor to have a meeting at your house?"

"Yep," says the clerk.

"Isn’t California a ‘three strikes and you’re out’ state?"

"Yep."

Burbank, we we have a problem. I hope it’s unlikely that a free agent who has three meetings at her house, and gets caught, prosecuted, and convicted each time, goes to jail for the rest of her life. But the mere possibility reflects a wider problem with America’s legal, policy, and tax regimes. They were built for a (p. 201) work world that has largely disappeared, and are ill equipped for the new world that has arrived.

Source:

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

(Note: italics in original; ellipsis added.)

Private Money Can Top Government Money in Space, as in IT

Lots of people are building new IT companies. You can start a company and sell it to Yahoo! or Google in a couple of years. But so can anyone else. Aerospace is different. To paraphrase John F. Kennedy in 1962: We choose to go to the moon not because it’s easy, but because it’s hard.

That’s why, as a long-time investor in IT and Internet start-ups, I’m now spending more and more time on private aviation and commercial space start-ups. I’m trailing an illustrius crew of IT pioneers: Elon Musk (Space-X, rockets, formerly with PayPal), Vern Raburn (Eclipse Aviation, very light jets, formerly at Microsoft, Symantec and Lotus), Jeff Bezos (Blue Origin, rockets, and still at Amazon, too!), Jeff Greason (XCOR, rockets and formerly with Intel) and Ed Iacobucci (DayJet, air taxi operator, and founder of Citrix).

. . .

On the space side, there’s a . . . strong parallel with the world of IT. The establishment in "space" is the government and especially the military, just as it once was (along with academia) for the Internet. I remember the days when commerce on the Internet was considered sleazy—but look at the innovations and productivity it unleashed.

In the same way, the current priests of space are dismayed by the privately funded space start-ups—unsafe, sleazy, frivolous. Imagine: Ads on the side of a rocket ship! Well, why not, if it helps pay for the fuel… and the R&D that designed the thing?

For the full commentary, see:

ESTHER DYSON "New Horizons for the Intrepid VC." The Wall Street Journal (Tues., March 20, 2007): A19.

(Note: ellipses added, except for the ellipsis following the word "fuel" which was in the original.)

Why Starbucks Coffee is a Bargain

(p. 161) These coffee places, most of which didn’t even exist ten years ago, had several virtues. They were always in convenient locations. They permitted, even welcomed, patrons to sit and talk for several hours. And they had tables for spreading out my materials and electrical outlets for plugging in my equipment. In short, they provided a four-hour office rental for the price of a three-dollar latte.

. . .

(p. 162) Starbucks and its caffeinated cousins are part of what I call the free agent infrastructure. The components of this infrastructure, which I’ll review in a moment, include copy shops, office supply superstores, bookstore cafés, overnight delivery services, executive suites, and the Internet. Like America’s system of federal highways, the free agent infrastructures form the physical foundation on which the economy operates. But unlike the federal highway system, which was planned and paid for by the government, this infrastructure emerged more or less spontaneously. Like so many other aspects of Free Agent Nation, it is self-organized. Nobody is in charge of it. That’s why it woks. It works so well, in fact, that few people realize that this collection of commercial Establishments even constitutes an infrastructure.

Source:

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

“Free Agent Nation” Still Rings True

Source of book image: http://g-ec2.images-amazon.com/images/G/01/ciu/10/ae/8ca3d250fca0f5b077de4010.L.jpg

Daniel Pink’s 2001 Free Agent Nation has been on my to-read list since it first came out. It finally made it to the top—at least in the author-abridged two-cassette incarnation.

I always found the basic idea appealing: the appeal of the freedom of working for yourself—Harry Browne’s How I Found Freedom in an Unfree World, but for real.

But I also was a little anxious; fearful that the book would place too much emphasis on seeming flash-in-the-pan dot.com labor market phenomena and rhetoric.

To my relief, I can report that little in the book depends on the dot.com over-exuberance. The internet appears, as an infrastructure enabler, but the free agents are mainly doing more standard stuff, but doing it from a home office, and doing it project-by-project.

Pink is not an academic, which has pros and cons. One of the pros is that his prose is pleasant. Another is that he has an ear for a good story and a telling example. Perhaps a con is that he often hasn’t had the time, or the interest, (or maybe the data just don’t exist) to often follow-up with how widespread his examples are.

Still there’s some good stuff here. Like suggesting that free agency is what you would expect more of us to pursue, as we work our way up Abraham Maslow’s hierarchy of human needs. (In college I was enthused enough about Maslow that I was thinking of minoring in psychology, until they told me how many hours I would have to run rats through mazes before I’d be allowed to open a Maslow book.)

And there’s plausible discussion about how in some ways free agency is more secure than a regular job (multiple clients means diversification). And there is more freedom to control your own time, and be your authentic self.

There’s also some good discussion of how the government makes free agency harder through health care and taxation policies.

All-in-all, this book helps make the case that labor can thrive in a Schumpeterian world of creative destruction.

Reference to the book:

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

DNA Scientist-Entrepreneur Venter at Sea

The projected path of Venter’s Sorcerer II ship in collecting sea organisms. Source of map: http://scrippsnews.ucsd.edu/Releases/?releaseID=706

Craig Venter’s private gene-sequencing effort beat the government’s effort. His new research is being funded by a $24.5 million private grant from the Gordon and Betty Moore Foundation. (For more information beyond the WSJ article excerpted below, see the Scripps Institution of Oceanography press release.)

(p. B1) Marine microbes are among the most abundant life form on the planet and among the most mysterious. Now, results from the first phase of a global expedition are expected to provide a glimpse into this long-hidden world while potentially leading to new drugs and even fighting climate change.

Craig Venter, the brash biologist who helped crack the human genome seven years ago, says he and other scientists have used DNA-analysis techniques to discover millions of new genes and thousands of new proteins in ocean microbes. These microscopic life forms are mainly bacteria and organisms known as archaea.

"Everything we’ve seen is a surprise," Mr. Venter said in a phone interview from his marine research vessel, Sorcerer II, in the Sea of Cortez. The unexpected variety of microbial DNA he’s found overturns earlier notions that the oceans are a homogenous soup of bacteria and other microscopic life. The details are being published today in the Public Library of Science Biology, an Internet-based scientific journal.

A diverse supply of microbial DNA from the oceans could be a rich lode for scientists. Drug companies are hunting for new compounds in sea creatures, especially to attack cancer and neurodegenerative diseases. The new data will also allow researchers to compare the DNA of oceanic bacteria to the genetic code of microorganisms that cause human disease.

"This is the largest DNA sequence ever obtained, and the magnitude of what’s being done is entirely unparalleled," said Douglas Bartlett, professor of marine microbiology at the University of California, San Diego, who isn’t involved in Dr. Venter’s project. Marine microbes "have all kind of metabolic activity. It is expected that [Dr. Venter’s team] will discover new pathways for making drugs and treating infectious disease."

For the full story, see:

GAUTAM NAIK. "Seafaring Scientist Sees Rich Promise In Tiny Organisms." The Wall Street Journal (Tues., March 13, 2007): B1 & B5.

Photo on left shows Venter (on left) on his Socerer II research ship. Photo on right shows a slide of sea bacteria collected by Venter. Source of photos: http://scrippsnews.ucsd.edu/Releases/?releaseID=706

Advice from Charles Koch: A Successful Business Schumpeterian

Source of book image: http://media.wiley.com/product_data/coverImage300/89/04701398/0470139889.jpg

When Charles Koch became the chief executive of Rock Island Oil & Refining after the death of his father in 1967, the company was a moderately successful enterprise based in Wichita, Kan. He renamed it Koch Industries in honor of his father — and over the next 40 years proceeded to transform Fred Koch’s legacy into the world’s largest private company. Koch Industries — now a commodity and financial conglomerate that includes brands such as Stainmaster, Lycra and Dixie cups — has 80,000 employees in 60 countries. Its revenue last year was $90 billion. In one generation, the book value of Koch Industries has increased 2,000-fold. That’s an 18% compounded annual return — comparable with the long-term track record of Warren Buffett’s Berkshire Hathaway.

. . .

At age 71, Mr. Koch clearly feels that the time has come to pass along the business formula that has served him so well. In "The Science of Success," he describes a technique, called Market-Based Management (MBM), that he says evolved from his reading, early in his career, in history, political science, economics and other disciplines. He arrived at an understanding of what allows a free society to prosper, Mr. Koch says, and decided to apply those principles to business.

. . .

. . . He is especially fond of the "Austrian school" of economists, such as Ludwig von Mises and Joseph Schumpeter, who emphasized production processes, technology and the dynamic competitive models of "creative destruction."

For the full review, see:

MARK SKOUSEN. "BOOKS; A Short Course in Long-Term Value." The Wall Street Journal (Weds., March 7, 2007): D8.

(Note: ellipses added.)