Entrepreneurship – Page 193 – artdiamondblog.com

Entrepreneurship Survives, Even in Mogadishu

In Mogadishu the nose of one of the two Black Hawk helicopters that were were shot down in 1993. Source of the photo: online version of the NYT article cited below.

MOGADISHU, Somalia, Sept. 23 — They call her the “Black Hawk Down” lady.

And in the corner of her dirt yard, beneath rags drying in the sun and next to a bowl of filthy wash water, she keeps a chunk of history that most Americans would probably like to forget.

It is the battered nose of a Black Hawk helicopter, from one of the two that got shot down in Mogadishu on Oct. 3, 1993, in an infamous battle that killed 18 Americans, led to a major foreign policy shift and spawned a big movie.

The Black Hawk Down lady stands fiercely at her gate and charges admission to see it.

“You, you, you,” she said on a recent day, jabbing her finger at three visitors. “Pay, pay, pay.”

. . .

Ecstatic Somalis ransacked the wreckage, stripping the helicopters and melting down the metal. Some people even ripped insignia patches off the bodies of the soldiers to keep as grim souvenirs.

. . .

But Ms. Elmi had a different plan. Her husband had died a long time ago, and she had six children to feed. Two of her older sons were killed, she said, when the helicopter crashed. She dragged the cracked nose piece, about five feet across but actually pretty light because it was made of fiberglass, back to her house.

. . .

Ms. Elmi began humbly, charging neighborhood boys the equivalent of a few cents to get a peek at her one exhibit, the last known chunk of wreckage from what Somalis refer to as Ma-alinti Rangers, the Day of the Rangers.

But after the movie “Black Hawk Down” came out in 2001 — and pirated copies found their way to Mogadishu — business boomed.

“So many people came, I cannot count,” she said. “White people, brown people, black people.”

When asked why they come, she snapped: “How should I know? Do you think I am mind reader?”

The entrance fee is now around $3 for foreigners; locals get a discount and pay 75 cents.

. . .

Some people say they fear the Islamists will impose a draconian version of Islam in Somalia, which up until recently had been relatively secular.

But Ms. Elmi said she loved the Islamists. And she has her own reasons.

“They bring peace,” she said. “And peace brings tourists.”

For the full story, see:

JEFFREY GETTLEMAN. "MOGADISHU JOURNAL; From the Ashes, a Chunk of America Beckons in Somalia." The New York Times (Thurs., September 28, 2006): A4.

(Note: in the print version, but not the online version, there is a subheader placed in the center of the article that reads: "An entrepreneur feeds a family, thanks to the remnants of a battle.")

(Note: ellipses added.)

Sprint to Risk Billions on New Infrastructure

Source of graphic: online version of the WSJ article cited below.

If Sprint bets on WiFi, they’re betting with their money; if the government bets on WiFi, they’re betting with your money. If Sprint succeeds, thereby benefiting the consumer, at no risk to the consumer, the consumer should not object to their earning huge profits.

Note also, that this is a plausble candidate for a firm trying to follow Clayton Christensen’s advice to try to disrupt itself. (And see the comment at the end, for someone who hasn’t read Christensen, or doesn’t believe what he has read.)

Analysts say building a nationwide WiMax network could cost Sprint between $1 billion and $4 billion, a hefty sum for a company that is already struggling to meet Wall Street’s expectations. Sprint said it expects to invest $1 billion on the project in 2007 and between $1.5 billion and $2 billion in 2008.

Sprint’s decision carries considerable risks: Investors have hammered telecom companies that have made large capital investments in new technologies, banking on future markets to emerge. For example, among other things, Verizon Communications Inc.’s stock has been under fire as the company is rolling out a costly new fiber optic network that it says will position the company to deliver a bundled TV, Internet, and phone service. Also, WiMax technology is still untested on a large scale.

Sprint is making a huge bet that consumer demand for wireless Internet access and services such as cellphone downloads of music and video will continue to grow in the coming years. Consumers already can get access to wireless Internet service at Wi-Fi "hotspots" in airports and coffee shops, and some cities, like Anaheim, Calif., are blanketing their terrain with Wi-Fi connections.

. . .

. . . , some analysts and industry experts question why the company is gearing up for such a major capital investment when it is already even or ahead the other top U.S. carriers, Verizon and Cingular Wireless, when it comes to data services. "Why compete against yourself? It doesn’t make a lot of sense at this point," said Mike Thelander, principal analyst at Signals Research Group who predicted several weeks ago that Sprint would choose WiMax.

For the full story, see:

AMOL SHARMA and DON CLARK. "Sprint Bets on New Wireless ‘WiMax’." Wall Street Journal (Tues., August 8, 2006): B1-B2.

(Note: the above passages are from the online version, which was later, and less tentative about Sprint’s intentions, than the print version.)

(Note: ellipses added.)

A Tale of Two Churches: Russia Has an Entrepreneurial Tradition Too

Two old and exotic churches, St. Basil’s in Moscow and Kizhi in the Russian north, survived the Soviet era and are invariably depicted in brochures and books to suggest the distinctiveness of Russian culture. Both feature the tent roofs and onion domes that dominated the skyline of medieval Russia. But each bears mute witness to a very different tradition: one, imperial centralism; the other, entrepreneurial regionalism. Both are embedded in Russia’s history; the conflict between them may well determine Russia’s destiny.

St. Basil’s, looming over Red Square, is an enduring symbol of theatrical autocracy; the Kizhi church, of frontier inventiveness. Authoritarian centralism has been growing recently under President Putin. But he also is fond of Kizhi and brought its new priest with him on his last trip to New York.

. . .

Tolerance was implicit in the northern tradition of dvoeveria: the simultaneous belief in both the old pagan spirits and the new Christian God. Medieval petroglyphs of the Kizhi region freely intermixed symbols of both. Peasants in the region were not enserfed. The northern region lost much of its independent power when Moscow sacked and subdued Novgorod.

. . .

Many more people have seen St. Basil’s on Red Square than Kizhi on an island in Lake Onega — and most see Russian history in terms of autocratic power in Moscow rather than creativity amid adversity in the regions. Kizhi is the supreme monument to this forgotten tradition that continued to unfold as the vast Russian domain spread north to the Arctic Ocean and across the Pacific to Alaska in the 17th and 18th centuries.

No one knows who was the architect of either monument. But Russian popular folklore suggests that the creator of St. Basil’s was forcefully either blinded or drowned to assure that it could never be duplicated. In contrast, the creator of Kizhi is said to have simply thrown his ax into the lake and lived on peacefully as a holy man in the northern forests.

During that time, Moscow autocrats looked out from the closed front porch of St. Basil’s to see the enemies of central power drawn and quartered publicly in Red Square. By contrast, the Kizhi church was wider and open to the sky — and where local people gathered to solve practical problems, facing a vista of lakes and forests.

Much of the renewed vitality in Russia today is coming from young people in the regions. Their hopes for a more participatory and accountable political and economic future depend on the kind of open community that created Kizhi — not the closed circles that cling to St. Basil’s.

For the full commentary, see:

JAMES H. BILLINGTON. "MASTERPIECE; Two Churches, Two Russias; One born of authoritarian centralism, the other of entrepreneurial regionalism." Wall Street Journal (Sat., September 16, 2006): P18.

Entrepreneur’s $100 Million Rocket Destroyed

Lesson one: entreprepreneurship is risky, and often fails. Lesson two: when an entreprepreneur’s rocket is destroyed, his $100 million goes up in smoke; when NASA’s rocket is destroyed, your $100 million goes up in smoke.

Government and industry efforts to develop innovative, less costly rockets suffered a high-profile setback Friday, when the initial flight of a satellite launcher bankrolled by outspoken entrepreneur Elon Musk ended in failure.

After Mr. Musk spent nearly four years and well over $100 million of his personal fortune to create a rocket company from scratch, his Falcon project became the best-known and most aggressive entrant in the fledgling small-rocket segment. But according to preliminary assessments, a fuel leak and resulting fire during last week’s inaugural launch shut down the main engines less than 30 seconds after blastoff from a Pacific atoll. The rocket and a research satellite built by Air Force Academy students were destroyed.

For the full story, see:

Pasztor, Andy. "Entrepreneur’s Rocket Suffers Setback During Maiden Launch." Wall Street Journal (Monday, March 27, 2006): A14.

Eleven-Year-Old Crippled for Life by Mao Supporters

Source of book image: http://www.holtzbrinckpublishers.com/henryholt/Search/SearchBookDisplayLarge.asp?BookKey=1524294

(p. B29) This improbable journey, from Maoist orthodoxy to the entrepreneurial quasicapitalism officially described as “socialism with Chinese characteristics,” is the main theme of “Chinese Lessons,” but Mr. Pomfret, a reporter for The Washington Post, gives his tale a twist. He tells it not only through his own experiences as a student and journalist but through the life stories of five university classmates, who suffered through the Cultural Revolution as children, found inspiration and hope in the growing democracy movement and lived to see a China that neither they nor their parents could have imagined. . . .

All the lives Mr. Pomfret explores are extraordinary, and each sheds its own light on recent Chinese history. Perhaps the most endearing of his characters is Guan Yongxing, better known as Little Guan, who as an 11-year-old suffered social ostracism after accidentally using a piece of paper with “Long Live Chairman Mao!” on it to wipe herself in the bathroom.

After classmates threw her to the ground, no doctor would treat her dislocated shoulder, leaving her crippled for life. Her father’s job as a schoolteacher made the Guan family a prime target for abuse, and Little Guan, rather than endure ridicule and torment at school, picked cotton and sprayed fertilizer on the fields, her back constantly burned by chemicals leaking from the tank on her back. Tough, determined and highly intelligent, she survives and eventually prospers in the new China.

. . .

Zhou Lianchun, called Book Idiot Zhou by a contemptuous Communist Party official, meted out insults and torture as part of a Red Guard brigade. “I did what I was told and, being 11, I liked it,” he tells Mr. Pomfret.

. . .

More even than sex, students want just a little bit of the good life that seems to be in reach as China’s rulers relax their economic policies. To get it they master a strange kind of doublethink, pledging allegiance to the party and Communist ideals while scheming to start a business.

Book Idiot Zhou, a history teacher by day, jumps into a business partnership to process urine for the pharmaceutical industry. “Several days a week, he taught Marxism, Leninism and Maoist thought and railed against the exploitation of the capitalist class,” Mr. Pomfret writes. “The rest of the time he spent as a budding entrepreneur, employing dozens at rock-bottom wages, working the system to enrich himself, his partners and his family.”

. . .

His classmates have done well. But their lives, and the China described in “Chinese Lessons,” bear a heavy load of suppressed grief, terrible compromises and boundless cynicism. At a new drive-in called the Happy Auto Movie Palace, Mr. Pomfret notices something strange about the concrete slabs underneath his feet. They show the marks of tank treads. The drive-in owner bought them after the government repaved Tiananmen Square.

This strikes Mr. Pomfret as bizarre, but not the owner. “It was a good deal,” he says.

For the full review, see:

WILLIAM GRIMES. "Books of The Times; Twisting Along China’s Sharp Curves." The New York Times (Fri., August 4, 2006): B29.
(Note: ellipses added.)

Entrepreneur Found Creative Way to Save Thousands of Babies

(p. 1) The babies were lined up under heaters and they breathed filtered air. Few of them weighed more than three pounds. They shared the Boardwalk there on Coney Island with Violetta the Armless Legless Wonder, Princess WeeWee, Ajax the Sword-Swallower and all the rest. From 1903 until the early 1940’s, premature infants in incubators were part of the carnival.

It cost a quarter to see the babies, and people came again and again, to coo and to gasp and say look how small, look how small. There were twins, even, George and Norma Johnson, born the day before Independence Day in 1937. They had four and a half pounds between them, appearing in the world a month too soon because Dorothy Johnson stepped off a curb wrong and went into labor.

All those quarters bought a big house at Sea Gate for Dr. Martin A. Couney, the man who put the Coney Island babies on display. He died broken and forgotten in 1950 at 80 years old. The doctor was shunned as an unseemly showman in his time, even as he was credited with popularizing incubators and saving thousands of babies. History did not know what to do; he was inspired and single-minded, distasteful and heroic, ultimately confounding.

. . .

(p. 31) He displayed incubators developed by his mentors at the Berlin Exposition of 1896, and though they caught on in Europe, acceptance was slower in the United States.

Using babies from New York hospitals that lacked the facilities to care for them, Dr. Couney mounted a display at Luna Park, a Coney Island amusement park, in 1903, soon adding another at a second Coney Island park, Dreamland.

. . .

At least 8,000 babies passed through the incubators, and the doctor was credited with saving at least 6,500, according to news reports of the time. The Johnson twins made it off the Boardwalk and grew up strong and tall. George Johnson found work, and a sense of freedom, driving trains up and down the coast for the Pennsylvania Railroad. Norma Johnson married a man named Coe. Between the twins there are nine children, 13 grandchildren and one great-grandchild. George and Norma attended Dr. Couney’s induction ceremony yesterday. "My father didn’t have any money, and this doctor says you can use our incubator for free, but you have to put them on display on Coney Island," Mr. Johnson said, sitting next to his sister on the porch at the Sheepshead Bay Yacht Club the other day. "It was us and a lot of other people, too."

The twins will turn 68 the day before Independence Day, old enough to enjoy the seaside air on an idle weekday morning.

Down the Boardwalk, the beach is open. Pretty girls and seagulls play their games. For a few dollars, you can watch a baseball game, shoot paint pellets at a hungry young dude or become a tattooed lady.

The likes of Martin A. Couney nobody has seen in 60 years.

For the full story, see:

MICHAEL BRICK. "And Next to the Bearded Lady, Premature Babies." The New York Times, Section 1 (Sun., June 12, 2005): 1 & 31.

(Note: ellipses added.)

The Johnson twins who were displayed, and whose lives were saved, by Dr. Couney. Source of photo: online version of NYT article cited above.

Road Opens a Year Early: Contract Included Incentives

With monetary incentives to finish early, Hawkins Construction Company finishes westbound lanes a year ahead of schedule. Source of photo:
http://www.omaha.com/index.php?u_pg=1636&u_sid=2214442&u_rnd=7720251

The long delays, and lack of visible progress in expanding 132nd, near our house, became a running joke—but the wasted travel time was not funny. Similar road construction delays were occuring all over town, to the point where it looked as though the issue might threaten the mayor’s re-election. So he got serious, and in new road contracts, included substantial monetary incentives for finishing the job ontime, and even more incentives to finish it early. The expressway pictured above is one of those built under the new contract. Maybe incentives really do matter?

(p. 1A) An electronic sign above West Dodge lured drivers with a simple message: "Expressway Open."

The real draw was the quicker commute drivers encountered Thursday evening during the first rush hour after the opening of the West Dodge Road Expressway.

After two years of construction, the expressway’s westbound bridge opened to traffic at 10:35 a.m. Thursday, more than a year ahead of schedule.

A steady flow of traffic streamed across the bridge Thursday evening.

"It was wonderful," said commuter Jean Crouchley.

For the full article, see:

MICHAEL O’CONNOR AND RICK RUGGLES. "A Concrete Example of Progress; Motorists Expect Daily Drives to be Quicker with New Route." Omaha World-Herald (Friday, July 28, 2006): 1-2.

(Note: The online version of the article had the title: "Making quick work of commute on Expressway.")

Tom Peters: Over-the-Top Schumpeterian

Source of book image: http://www.amazon.com/gp/product/customer-reviews/078949647X/ref=cm_cr_dp_2_1/104-2835260-2878345?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Tom Peters became famous as the co-author of the business classic In Search of Excellence (1982). His Re-imagine! is exuberant, optimistic, exaggerated, and stylistically over-the-top. I find it fun, bracing, entertaining, and sometimes edifying. If you like the prose of The Cluetrain Manifesto and Gilder’s Telecosm, then you may also like Re-imagine!

Here is an early, very brief passage:

(p. 9) My overall vision, in brief: Business is cool. It’s about Creativity and Invention and Growth and Service. It’s about Adam Smith’s "hidden hand." And Nobel laureate Frederick Hayek’s "spontaneous discovery process." And economist Joseph Schumpeter’s "gales of creative destruction." At its best, it’s about building things that make life less burdensome than it was in medieval times. About getting us beyond—far, far, far beyond—the quasi-slavery of the Middle Ages, the indentured servitude of the first 150 years of the Industrial Revolution, and the cubicle slavery of the last three-quarters of a century.

Yes, business is cool.

(Or at least it can be.)

The citation to the book is:

Peters, Tom. Re-Imagine! London: DK, 2003.

(Note: the italics in the above passage appears that way in the original.)

Job Hopping May Aid Technological Experimentation

When employees jump from company to company, they take their knowledge with them. ”The innovation from one firm will tend to bleed over into other firms,” Professor Rebitzer explained. For a given company, ”it’s hard to capture the returns on your innovation,” he went on. ”From an economics perspective, that should hamper innovation.”

He found a possible answer to the puzzle in the work of two management scholars, Carliss Y. Baldwin and Kim B. Clark. In their book ”Design Rules: The Power of Modularity” (MIT Press, 2000), they argued that when there is a lot of technological uncertainty, the fastest way to find the best solution is to permit lots of independent experiments. That requires modular designs rather than tightly integrated systems.

”By having a lot of modular experimenters, you can take the best, which will be a lot better than the average,” Professor Rebitzer said. Employee mobility may encourage productive innovation, as people quickly move to whichever company comes up with the best new technology.

. . .

To Professor Rebitzer’s surprise (though not his co-authors’), it turns out that Silicon Valley employees really do move around more often than other people. The researchers looked at job changes by male college graduates from 1994 to 2001. During that period, an average of 2.41 percent of respondents changed jobs in any given month.

But, they write, ”living in Silicon Valley increases the rate of employer-to-employer job change by 0.8 percentage point.”

”This effect is both statistically and behaviorally significant — suggesting employer-to-employer mobility rates are 40 percent higher than the sample average.”

For the full commentary, see:

VIRGINIA POSTREL. "ECONOMIC SCENE; In Silicon Valley, Job Hopping Contributes to Innovation." The New York Times (Thursday, December 1, 2005): C4.

A PDF of the paper by Rebitzer and colleagues is downloadable at: http://www.federalreserve.gov/Pubs/feds/2005/200511/200511abs.html

The book Postrel praises, is:

Source of book image: http://www.amazon.com/gp/product/customer-reviews/0262024667/104-2835260-2878345?redirect=true

Entrepreneurial Philanthropy

Some major donors who want to make a difference during their lives. Source of graphic: online version of WSJ article cited below.

(p. A1) "If we give it away now, we’re going to do a good job with it, instead of leaving it to future generations of foundation folks," says Herbert M. Sandler, 74 years old. He and his wife, Marion, intend to donate the $2 billion they expect from the sale of the California savings and loan Golden West Financial Corp. before "we shuffle off this mortal coil."

The Sandlers’ plan, like Mr. Buffett’s $30 billion gift to the Gates foundation announced last month, exemplifies the changing pattern of U.S. philanthropy — and the (p. A8) Gates organization’s increasing influence over it. The charitable titans of today are unlike many of the old-school business bluebloods who sought to immortalize their names by setting up foundations that parceled out small gifts forever. Instead, some of America’s wealthiest moguls-turned-philanthropists — Eli Broad, Charles Bronfman, Lawrence Ellison, Michael Milken and Sanford Weill, among others — favor spending money faster, while retaining a high degree of control and demanding more accountability from the programs they fund.

. . .

By contrast, some of today’s tycoons increasingly limit the time frame, leaving tomorrow’s magnates to handle tomorrow’s problems. Mr. Bronfman, an heir to the Canadian liquor fortune, says he plans to exhaust the money in his $120 million foundation by 2020. He is spending at a $12 million to $14 million a year clip. "Why should I saddle the next generation with something I’m passionate about?" he says. "Let them have their own passions and do their own things." Mr. Bronfman, 75, believes in narrowly targeted goals — in his case, they include helping pay for young Jews to visit Israel. So far, his organization has had a hand in sending 112,000 people on such trips.

Mr. Milken, a financier who served two years in jail for securities fraud in the 1990s, funds medical research and K-12 education; he founded the Prostate Cancer Foundation in 1993 after being diagnosed with the disease himself. He said the six foundations he and his brother Lowell have established — which have funds of about $350 million — spend an average of 15% of their assets each year. Three of the six have attracted a total of $300 million in gifts from outside donors who, like Mr. Buffett, preferred supporting existing ventures to starting their own.

Mr. Milken said he negotiates with medical centers to make sure gifts go to research and clinical trials rather than overhead. In return, his foundations waive patent rights to any discoveries made as a result of their funding. "You can’t just write checks," he said. "You have to be actively involved. You have to introduce new management, marketing, other types of activities to empower medical research."

Mr. Sandler and his wife, Marion, have no patience for big foundations that spend 5% annually. "They are never going to give it [all] away," he says. Many foundations, he adds, "become bureaucratic."

He and his wife built their Oakland S&L, Golden West, from a small thrift into the nation’s second largest savings and loan by emphasizing lean operations and a laser-like focus on home lending. The couple, who are co-chief executives, recently agreed to sell the company to Wachovia Corp.

The Sandlers have already given heavily to start the Center for Basic Research in Parasitic Diseases at University of California at San Franciso’s medical school. The center focuses on Third World diseases neglected by major drug companies. Along with malaria, the family’s philanthropy has focused on finding treatment for the millions in South America afflicted by Chagas disease, a deadly insect-born ailment. A donor to the Democratic Party, Mr. Sandler has also backed progressive causes, including Human Rights Watch, the American Civil Liberties Union, and Association of Community Organizations for Reform Now, Acorn.

Mr. Sandler patterns his giving after the Gates foundation. He admires the Gates foundation’s program in Zambia, fighting malaria, and hopes to work together to replicate its methods in other countries. Like Mr. Gates, Mr. Sandler is looking for "gaps" in giving that he can fill, such as basic scientific research shunned by most big drug companies. Another interest: fighting asthma, which disproportionately afflicts the poor in inner-city America.

Mr. Sandler says he’s not afraid to take risks with his money, the same way he did in business. And he doesn’t want a foundation that, after his death, would spend frugally just to stay in business, or support causes far from his heart. "One prays that when we are going down the tubes, we will be giving that last million dollars," he says.

For the full story, see:

JOHN HECHINGER and DANIEL GOLDEN. "The Great Giveaway; Like Warren Buffett, a new wave of philanthropists are rushing to spend their money before they die." The Wall Street Journal (Sat., July 8, 2006): A1 & A8.

Source of graphic: online version of the WSJ article cited above.

Entrepreneurs Saluted in Orange Business Services Ad

Source of screen captures: the downloaded Orange Business Services BBC World ad cited below.

Last month (June 2006) when I was in France, I saw a fun Orange Business Services ad on BBC World. Two entrepreneurs open their fast food truck in the middle of an empty desert. Something like a comet strikes the desert and a crowd of cars appears and a line forms at the truck. The entrepreneurs smile. Tag line: "here’s to the entrepreneur in all of us."

Orange Business Services let’s you watch, or download, the ad at: http://www.francetelecom.com/sirius/obs/en/index.html?cmp=BAC-van-bbcworld

(I saw the ad in Sophia Antipolis, France on BBC World, at about 7:10 AM, French time, on 6/23/06.)