Category: Entrepreneurship

“Proud” Entrepreneurs’ “Joy Was Palpable”

(p. A13) People of all backgrounds are starting to see how they can participate in our wonderful free-market system. They’re innovating, creating jobs and lifting themselves and others up.

I was fortunate to come to that same realization as a young man. Although I had always aspired to be financially successful, my role models in Nebraska City, Neb., of the 1940s and ’50s were mainly doctors, dentists and attorneys in town. There was nothing to point me toward founding a discount brokerage firm, as I ultimately did with Ameritrade. Luckily, on my father’s advice, I took a job as a credit reporter for Dun & Bradstreet.

It wasn’t a high-paying or respected job, but it meant I spent my days driving from business to business in Nebraska and Iowa, interviewing entrepreneurs about their balance sheets. Those business owners shared proud stories of how they built their companies. Their joy was palpable. Had I not received that education in the field, I might never have become an entrepreneur.

For the full commentary, see:

Joe Ricketts. “In Praise of Today’s Entrepreneurs.” The Wall Street Journal (Tuesday, November 5, 2019): A13.

(Note: the online version of the commentary has the date Nov. 10, 2019, and has the title “Big Business Is Overcharging You $5,000 a Year.”)

Ricketts’s commentary is related to his book:

Ricketts, Joe. The Harder You Work, the Luckier You Get: An Entrepreneur’s Memoir. New York, NY: Simon & Schuster, 2019.

YouTube Archives Can Reduce the Pain from Missing What Has Been Creatively Destroyed

(p. 10) When Robb Alvey, an amusement park fanatic, heard that Universal Studios Orlando was shuttering its beloved “Jaws”-themed ride in 2012, he made sure to grab a front-row seat for the closing day.

Using a hand-held digital camera, he filmed the six-minute boat ride: from the skipper Jacob welcoming passengers; to the “mayday” distress call; to the first sighting of the prosthetic shark; to the grenade launchers and exploding fireballs; and, finally, to the “high-voltage” cable that fries the animatronic beast.

Mr. Alvey, 49, who lives in Orlando, Fla., and runs a website called Theme Park Review, uploaded the footage to YouTube. Seven years later, the video has been viewed more than 160 million times.

. . .

That longing for expired rides is certain to increase in coming years, as America’s theme parks are renovated: In August, Disney announced that Epcot will undergo yet another major overhaul, while Universal Orlando recently revealed plans for a massive new park called Epic Universe.

And when parks make big changes, the charmingly antiquated rides are often first to go. In 2014, Walt Disney World shuttered its Studio Backlot Tour, a behind-the-scenes look at movie production, to make room for “Star Wars”: Galaxy’s Edge, a blockbuster attraction that opened this year.

“The backlot tour was over two hours long, and took up a big part of your day, but it showed you every aspect of filmmaking,” said Alicia Stella, 37, a journalist who covers theme parks on her website Orlando ParkStop. “I miss those kinds of attractions. A lot of the new ones are fast-paced thrill rides.”

Such expansions are a reminder that the parks are in a constant state of evolution, which makes the archivists’ efforts all the more crucial: You never know when your favorite ride could close for good.

For the full story, see:

Brian Raftery. “The Ride Has Ended, but It Still Goes On.” The New York Times, SundayStyles Section (Sunday, November 3, 2019): 10.

(Note: ellipsis added.)

(Note: the online version of the story has the date Nov. 2, 2019, and has the title “Where ‘Jaws,’ the Ride, Lives Forever.”)

Entrepreneur Hopes to Turn Jellyfish from Turtle Food into Tourist Attraction

(p. A7) In a rare marine lake on a hatchet-shaped atoll in Indonesia, four species of jellyfish have evolved in isolation and lost their ability to sting humans. There are believed to be millions of these benign jellyfish in Kakaban Lake, which has become a popular spot for tourists intrepid enough to reach the remote archipelago known as the Derawan Islands.

. . .

While the jellyfish continue to thrive on Kakaban, the island has just two human inhabitants, . . .

. . .

About 4,000 people, mostly Muslim, live on nearby Maratua, the largest of the Derawan islands.

. . .

Maratua has at least two marine lakes. One, Haji Buang, once had jellyfish to rival Kakaban Lake. But about five years ago, its owner, Hartono, thought he could make some quick cash by raising more than 30 hawksbill sea turtles in the lake.

Only after he put the turtles in the water did he discover that it would be illegal to sell their shells because the species is critically endangered.

The hawksbills, which feed on jellyfish, have nearly exterminated the lake’s population.

“Now I regret it,” said Mr. Hartono, 62. “There used to be more jellyfish than in Kakaban Lake, but we didn’t realize this could be a tourist area.”

Mr. Hartono said he was contemplating how to catch the turtles so he could return them to the sea — with the hope that the jellyfish population would recover.

For the full story, see:

Richard C. Paddock. “INDONESIA DISPATCH; A Harmless Jellyfish Fears Humanity’s Sting.” The New York Times (Monday, November 4, 2019): A7.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “INDONESIA DISPATCH; A Lake With Stingless Jellyfish and Hints of Hotter Seas.”)

Does Musk Want to Reach Mars or Conspicuously Consume Real Estate?

In my book Openness to Creative Destruction, I describe and praise those who I call “project entrepreneurs.” These are innovative entrepreneurs, like Walt Disney and Cyrus Field, who are motivated primarily by a desire to bring their project into the world, rather than a desire for conspicuous personal consumption. I have been unsure whether to count Elon Musk as a project entrepreneur. The evidence quoted below suggests the answer is “no.”

(p. M1) Over the last seven years, Mr. Musk and limited-liability companies tied to him have amassed a cluster of six houses on two streets in the “lower” and “mid” areas of the Bel-Air neighborhood of Los Angeles, a celebrity-filled, leafy enclave near the Hotel Bel-Air.

Those buys—plus a grand, 100-year-old estate in Northern California near the headquarters of Tesla, the electric car concern he heads—means Mr. Musk or LLCs with ties to him have spent around $100 million on seven properties.

For the full story, see:

Nancy Keates. “Elon Musk’s Big Buyout.” The Wall Street Journal (Friday, December 6, 2019): M1 & M6.

(Note: the online version of the story has the date Dec. 5, 2019, and has the title “Elon Musk Buys Out the Neighbors.”)

My book, mentioned at the top, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Google Pivots Back to Search and Away from Audacious Projects

(p. B1) Sundar Pichai’s appointment this week as chief executive of Google parent Alphabet Inc. effectively shifts the focus back on the company’s advertising profit machine and away from its “moonshots” and other potential new businesses.

Mr. Pichai’s promotion late Tuesday amounted to the biggest managerial overhaul of the internet giant since 2015, when co-founders Larry Page and Sergey Brin created Alphabet as a parent company above Google. Their goal then was to make Google and its highly profitable advertising businesses just one of many subsidiaries. The stated purpose, as they said in a public letter: “We are still trying to do things other people think are crazy.”

Those goals were on-brand for the two former Stanford University graduate students. They famously celebrated a “don’t be evil” ethos and were working on driverless cars, wearable computers, beating death and a host of other money-losing projects. The idea was to free the duo from the day-to-day at Google, which remains a profit machine, to build out new, world-changing ideas.

Those now include Alphabet’s Waymo unit, which is piloting self-driving car rides, and Calico Labs, which says it’s “tackling aging.”

At least financially, those efforts have yet to amount to much. Google, which includes search, YouTube, the Chrome web browser, hardware and much else, reported $40 billion of revenue in the past quarter alone, with a 23% margin. These areas draw in more than 99% of the parent company’s staggering $155 billion in annual revenue.

The rest of Alphabet eked out $155 million in revenue, and lost $941 million while doing it.

For the full story, see:

Rob Copeland. “Alphabet Backs Off the ‘Crazy,’ Turns to Reliable Model.” The Wall Street Journal (Friday, December 6, 2019): B1 & B4.

(Note: the online version of the story has the date Dec. 5, 2019, and has the title “Google Management Shuffle Points to Retreat From Alphabet Experiment.” The online version says that the title of the print edition was “Alphabet Backs Off On Experimentation.” My copy of the print edition had the title “Alphabet Backs Off the ‘Crazy,’ Turns to Reliable Model.”)

How Much Do Entrepreneurs Learn from Failure?

(p. R2) . . . , I looked at 8,400 German startups to see if the new companies launched by failed entrepreneurs did any better than first-timers.

They didn’t. In fact, they had poorer outcomes the second time around.

Failed entrepreneurs were more likely to go bankrupt or dissolve their business than first-time entrepreneurs. In fact, even if an entrepreneur had run a business successfully before, they were just as likely to see their new business fail as a first-time entrepreneur.

Other researchers have reached similar conclusions. A Harvard Business School study of venture-capital-backed firms in the U.S., published in the April 2010 Journal of Financial Economics, found that previously failed entrepreneurs were no more likely to succeed than first-time entrepreneurs.

A study of German entrepreneurs by a researcher at KfW Bankengruppe found that entrepreneurs who started a company after a failure performed poorly compared with other founders. “Their probability of survival in general as well as their risk of failure in particular is worse than that of other startups,” according to the researcher, who added: On average, “there is no indication that business failure triggers a reflection process in which entrepreneurs look back on mistakes they have made and adapt their future behavior accordingly.”

. . .

Why does this happen? Why don’t entrepreneurs learn from failure?

For one thing, learning is difficult in startup contexts.

Usually, when we think of learning, we think about gaining expertise through regular practice. In his “Outliers” book, for instance, Malcolm Gladwell calculates that it takes about 10,000 hours of practice to be a chess grandmaster.

But part of the reason practice pays off is because a chessboard is regular: It always has 64 squares and starts off with 32 pieces. You face one competitor. Likewise, in football, a consistent number of players on offense face a consistent number of defenders and try to advance by clear, regular rules.

These regularities don’t occur in startup situations. Markets evolve, customers are fickle, and opposition numbers vary. You must learn what it takes to become the equivalent of a chess grandmaster by playing with constantly evolving rules and opponents—making it much more difficult to interpret prior actions and experiences successfully.

For the full story, see:

Francis Greene. “If at First You Don’t Succeed, You Most Likely Will Fail Again.” The Wall Street Journal (Monday, December 2, 2019): R1-R2.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 1, 2019, and has the title “Why Entrepreneurs Don’t Learn From Their Mistakes.”)

The unpublished working paper, co-authored by Greene, that looked at 8,400 German startups, is:

Gottschalk, Sandra, Daniel Höwer, Francis J. Greene, and Bettina Müller. “If You Don’t Succeed, Should You Try Again? The Role of Entrepreneurial Experience in Venture Survival.” ZEW Discussion Paper, #14-009, 2014.

A related paper by three of the four co-authors, is:

Gottschalk, Sandra, Francis Greene, and Bettina Müller. “The Impact of Habitual Entrepreneurial Experience on New Firm Closure Outcomes.” Small Business Economics 48, no. 2 (Feb. 2017): 303-21.

The Harvard Business School paper, mentioned above, is:

Gompers, Paul A., Anna Kovner, Josh Lerner, and David S. Scharfstein. “Performance Persistence in Entrepreneurship.” Journal of Financial Economics 96, no. 1 (April 2010): 18–32.

Opening a New “Treasure Box of Strange Phenomena”

(p. D1) In the universe of office supplies, pencil lead — a mixture of graphite and clay, which does not include any lead — appears unexceptional beyond its ability to draw dark lines.

But 15 years ago, scientists discovered that a single sheet of graphite — a one-atom-thick layer of carbon atoms laid out in a honeycomb pattern — is a wonder. This ultrathin carbon, called graphene, is flexible and lighter than paper yet 200 times stronger than steel. It is also a good conductor of heat and electrical current.

Scientists imagined all of the remarkable things that graphene might be made into: transistors, sensors, novel materials. But after studying and cataloging its properties, scientists moved on to other problems. Practical uses have been slow to come, because part of what makes graphene alluring — its strength — also makes the material difficult to cut into precise shapes.

Last year, graphene burst back on the physics research scene when physicists at the Massachusetts Institute of Technology discovered that stacking two sheets of the material, twisted at a small angle between them, opened up a treasure box of strange phenomena. It started a new field: twistronics.

For the full story, see:

Kenneth Chang. “A Physics Trick: Take 2 Sheets of Carbon and Twist.” The New York Times (Tuesday, November 5, 2019): D1 & D3.

(Note: the online version of the story has the date Oct. 30, 2019, and has the title “A Physics Magic Trick: Take 2 Sheets of Carbon and Twist.”)

Ed Cray “Was a Meticulous Craftsman of American Biography”

In my Openness to Creative Destruction, I used Ed Cray’s book on Levi Strauss as the source of my account of how Jacob Davis invented Levi jeans.

(p. B14) Ed Cray, a journalist and educator who explored a broad spectrum of Americana with well-regarded biographies of Woody Guthrie, Chief Justice Earl Warren, the California serial killer Juan Corona, George C. Marshall and the bluejeans maker Levi Strauss, died on Oct. 8 in Palo Alto, Calif.

. . .

He delved into broad subjects, including police misconduct and medical care (“The Big Blue Line” in 1967 and “In Failing Health,” in 1970) and entrepreneurship (“Levi’s: The Story of Levi Strauss & Co.” in 1978 and “Chrome Colossus: General Motors and Its Times” in 1981).

. . .

“Ed was a meticulous craftsman of American biography with a penchant for deep research,” Professor Brinkley said in an email. “What mattered most to Ed was being a judicious judge of the past. There are no false notes in his body of work.”

. . .

Professor Joe Saltzman, a former colleague at the Annenberg School for Communication and Journalism at the University of Southern California, where Mr. Cray also taught, said in an email, “Although his books were not best-sellers, they always offered solid reporting and new insights into his subjects.”

For the full obituary, see:

Sam Roberts. “Ed Cray, 86, Biographer of American Lore.” The New York Times (Friday, November 1, 2019): B14.

(Note: ellipses added.)

(Note: the online version of the obituary was updated Nov. 1, 2019, and has the title “Ed Cray, Biographer of Woody Guthrie and Earl Warren, Dies at 86.”)

The Levi Strauss book that I mention above, is:

Cray, Ed. Levi’s: The “Shrink-to-Fit” Business That Stretched to Cover the World. Boston: Houghton Mifflin Company, 1978.

“Misguided Regulations” Kill Ride-Hailing App

(p. B3) New York ride-hailing business Juno USA LP filed for bankruptcy protection, blaming its demise on minimum wage regulations and mounting lawsuits from drivers, riders and competitors.

. . .

Ride-hailing companies are grappling with efforts by several states to extend employment protections to gig workers. In the face of additional regulation, the ride-hailing industry has been consolidating and pushing back against government measures that could upend their business models.

Gett, which bought Juno in a $200 million equity-based deal, said the company’s demise stemmed from “misguided regulations” in New York City.

. . .

Juno generated $269 million of revenue last year, a 23% annual increase, according to court papers. But this year its costs escalated after the city put in place a pay floor for ride-hail drivers.

The wage regulation pushed customer prices up by nearly 20%, bringing Juno’s rides per day down to 25,000 immediately before the chapter 11 petition from 47,000 per day in 2017.

. . .

Juno also said it spent substantial money on legal fees to defend itself against lawsuits from drivers, riders and competitors alike that the company described as “opportunistic.”

Drivers have sued over unemployment insurance, saying they were employees rather than independent contractors, and over stock incentives.

For the full story, see:

Alexander Gladstone. “Ride-Hailing App Enters Bankruptcy, Blaming Wage Law.” The Wall Street Journal (Thursday, Nov. 21, 2019): B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 20, 2019, and has the title “Ride-Hailing App Juno Enters Bankruptcy, Blaming Wage Law.”)

“Rejuvenate Bio” Startup Succeeds in Using Gene Therapy to Fight Age-Related Diseases in Mice

The online PNAS article mentioned below includes the information that one of the article’s referees was Aubrey de Grey, Cambridge scientist, and co-author of The End of Aging. Aubrey de Grey has been arguing for many years that anti-aging research will only take-off when proof-of-concept is achieved with mice. The PNAS article summarized below, appears to provide that proof-of-concept.

(p. A13) North Grafton, Mass.

A Cavalier King Charles spaniel named Shadow was at the front lines of a new approach to gene therapy.

Earlier this month, 7-year-old Shadow was the first dog to be screened at Tufts University for a pilot study attempting to use gene therapy to treat a type of heart disease that often afflicts aging cavaliers.

It’s part of a novel approach to gene therapy that has successfully treated age-related ailments in mice. Now it is being studied in dogs, with eventual hopes to test it in humans.

Researchers reported their success in mice in a study published Monday [Nov. 4, 2019] in the journal PNAS. They treated four age-related diseases in mice using genetic therapy: heart and kidney failure, Type 2 diabetes and obesity. On average, the mice experienced a 58% increase in heart function, a 75% reduction in kidney degradation, and normalized weight and blood-sugar levels in mice fed a high-fat diet, the study found.

. . .

What’s interesting about the new research in mice is that it is broader—targeting not a single rare defect, but common age-related ailments. The experiments injected mice with DNA to create an extra copy of a healthy gene, expressing more healthy material in cells linked to common diseases of aging.

The goal of the biotech company behind the mice study, Rejuvenate Bio —which sprang from research out of the lab of Harvard geneticist George Church, who is a co-founder—is to treat multiple aging-related diseases in dogs. It recently started working with Tufts University’s Cummings School of Veterinary Medicine on the dog pilot. If successful in dogs, the company hopes to treat similar human diseases but says that will take a lot more resources and time.

The firm says it expects the cost of dog genetic therapies would be similar to dog cancer treatments, including surgery, which range from about $500 to $8,000.

. . .

Nir Barzilai, director of the Institute for Aging Research at the Albert Einstein College of Medicine in New York City, praised the PNAS study as a proof of concept . . .

For the full story, see:

Sumathi Reddy. “YOUR HEALTH; Gene Therapy Targets Aging.” The Wall Street Journal (Tuesday, Nov. 4, 2019): A13.

(Note: ellipses, and bracketed date, added.)

(Note: the online version of the story has the date Nov. 4, 2019, and has the title “YOUR HEALTH; A New Approach to Gene Therapy—Now In Dogs, Maybe Later In Humans.”)

The PNAS article, summarized in the passages quoted above, is:

Davidsohn, Noah, Matthew Pezzone, Andyna Vernet, Amanda Graveline, Daniel Oliver, Shimyn Slomovic, Sukanya Punthambaker, Xiaoming Sun, Ronglih Liao, Joseph V. Bonventre, and George M. Church. “A Single Combination Gene Therapy Treats Multiple Age-Related Diseases.” Proceedings of the National Academy of Sciences (PNAS) (Nov. 4, 2019): https://doi.org/10.1073/pnas.1910073116.

The book co-authored by Aubrey de Grey, and mentioned way above, is:

de Grey, Aubrey, and Michael Rae. Ending Aging: The Rejuvenation Breakthroughs That Could Reverse Human Aging in Our Lifetime. New York: St. Martin’s Press, 2007.

Napa Vineyards Adapting to Global Warming

(p. D8) Few in Napa Valley feel the urgency to address climate change more than Beth Novak Milliken, president and chief executive of Spottswoode, a family estate that makes superb cabernet sauvignons here on the western edge of St. Helena.

. . .

Ms. Milliken and Aron Weinkauf, the winemaker and vineyard manager, are experimenting with rootstocks that might do better in drought conditions, and grapes like alicante bouschet, mourvèdre and touriga nacional that, as Napa warms, might be blended with cabernet sauvignon to maintain freshness, structure and acidity.

. . .

Like Ms. Milliken, Larkmead is experimenting with different grapes. Mr. Petroski has already initiated a study, planting three acres with a variety of grapes like touriga nacional, tempranillo and aglianico to determine over the next 30 years what might be better able to withstand a hotter environment than cabernet sauvignon.

“I just want people to think that Napa Valley makes great, delicious California-style wines,” he said. “If this is a great vineyard site, it will grow great grapes. It doesn’t have to be only cabernet or merlot.”

For the full story, see:

Eric Asimov. “The Pour; Napa Valley Confronts Climate Change.” The New York Times (Wednesday, November 6, 2019): D8.

(Note: ellipses added.)

(Note: the online version of the story was updated Nov. 7 [sic], 2019, and has the title “The Pour; In Napa Valley, Winemakers Fight Climate Change on All Fronts.”)