Category: Entrepreneurship

With G.E. Exit, Dow Index Has None of Original Firms

(p. B2) General Electric, the last original member of the Dow Jones industrial average, was dropped from the blue-chip index late Tuesday [June 19, 2019] and replaced by the Walgreens Boots Alliance drugstore chain.

. . .

The removal of G.E., which will formally occur June 26, reflects a shift in the economic composition of the United States, which long ago tilted away from heavy industry and toward services, such as technology, finance and health care.

And it also amounted to a milestone for General Electric. It was the last remaining original member of the index, when the stock market measure was introduced in 1896.

For the full story, see:

Matt Phillips. “G.E. Is Dropped From Dow; Was Last Original Member.” The New York Times (Wednesday, June 20, 2018): B2.

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

(Note: the online version of the story has the date June 19, 2018, and has the title “G.E. Dropped From the Dow After More Than a Century.”)

At 70, James Dyson Embarks on Audacious Electric Car Project

(p. B5) James Dyson, best known for innovative vacuum cleaners, said recently that he was preparing to introduce a new electric car and had 400 people working on the project.

. . .

But breaking into the car business is far more complex than it might appear at first glance. A new carmaker must design the vehicle and figure out how to manufacture it — and that is only the beginning. Success requires a number of to-dos: effective marketing, a dealer network and, perhaps, arranging buyer financing.

“There is a huge list,” said Peter Wells, a professor at Cardiff Business School in Wales. “That has been one of the reasons why the barriers to entry in the automotive industry have been relatively high.”

Still, Mr. Wells said that the car industry is “at a very important pivot point in its history now, where a combination of factors are radically altering what is possible.” And Mr. Dyson, 70, . . . , could be in a position to take advantage.

. . .

Mr. Dyson has proved himself a dogged inventor, designing high-end vacuum cleaners and other products like hair dryers. His technological savvy gives him a chance of scoring a hit in the much more complex and costly global car industry, analysts said. In 2015, he bought Sakti3, an American start-up that is working with solid state batteries. Mr. Dyson said he could be on track to commercializing a so-called solid state battery, which analysts say might be more powerful and safer than the lithium ion devices now used in electric cars and cellphones. He said both the start-up and his own team were working on the project. Continue reading “At 70, James Dyson Embarks on Audacious Electric Car Project”

Gig Jobs Benefit Workers by “Cutting Out Corporate Bosses and Rent-Seeking Middlemen”

(p. C4) An astounding 94 percent of American jobs created between 2005 and 2015 were for “alternative work.” Slow and steady growth used to be a cardinal virtue for the big American corporation. Now leanness and flexibility are prized, and nobody is spared. “In the end,” Hyman writes, “even white men were not protected from this new reality.”

Hyman, a labor historian at Cornell, argues that the common explanation for what happened — mainly, that our current dispensation was foisted on us by technological and economic change — is self-serving and inadequate. He says that human choice, including a palpable shift in values, played an essential role. “Temp” traces how, for corporations and government policymakers alike, “the risk-taking entrepreneur supplanted the risk-averse, but loyal, company man as the capitalist ideal.”

. . .

His ending, about the gig economy, is weirdly upbeat. He believes that it’s still possible for work to be rewarding — maybe even more possible, now that apps and online platforms offer the promise of (leaving in place a few rent-seeking technocapitalist billionaires, of course). Individuals can sell their labor directly to one another.

For the full review, see:

Jennifer Szalai. “BOOKS OF THE TIMES; Gig Jobs Replace Gray Flannel Suits.” The New York Times (Thursday, Aug. 23, 2018): C4.

(Note: ellipsis added.)

(Note: the online version of the review has the date Aug. 22, 2018, and has the title “BOOKS OF THE TIMES; How the ‘Temp’ Economy Became the New Normal.”)

The book under review, is:

Hyman, Louis. Temp: How American Work, American Business, and the American Dream Became Temporary. New York: Viking, 2018.

Those Who Are Overconfident Convince Others They Are More Competent

(p. B6) What is it about an elite upbringing that seems to make people feel qualified for tasks where they have little experience? This is one of the questions that inspired a study published Monday in The Journal of Personality and Social Psychology.

The researchers suggest that part of the answer involves what they call “overconfidence.” In several experiments, they found that people who came from a higher social class were more likely to have an inflated sense of their skills — even when tests proved that they were average. This unmerited overconfidence, they found, was interpreted by strangers as competence.

. . .

In an attempt to understand the implications of overconfidence, the researchers constructed a mock job interview. The students were asked the same question and videotaped. A group of strangers then watched the videos and rated the candidates. The selection committee generally opted for the same people who’d overestimated their trivia abilities. Overconfidence was misinterpreted as competence.

. . .

So how do managers, employers, voters and customers avoid overvaluing social class and being duped by incompetent wealthy people? Dr. Kennedy said she had been encouraged to find that if you show people actual facts about a person, the elevated status that comes with overconfidence often fades away.

“We may also need to punish overconfident behavior more than we do,” she said.

For the full story, see:

Heather Murphy. “Why High-Class People Think They Know More, and Why You Believe Them.” The New York Times (Tuesday, May 21, 2019): B6.

(Note: ellipses added.)

(Note: the online version of the story has the date May 20, 2019, and has the title “Why High-Class People Get Away With Incompetence.”)

The study mentioned above from the Journal of Personality and Social Psychology, is:

Belmi, Peter, Margaret A. Neale, David Reiff, and Rosemary Ulfe. “The Social Advantage of Miscalibrated Individuals: The Relationship between Social Class and Overconfidence and Its Implications for Class-Based Inequality.” Journal of Personality and Social Psychology (May 20, 2019), published online in advance of print publication.

Many Fewer Killed in Natural Disasters Than Were Killed 50 Years Ago

(p. A13) . . . it’s deceptive to track disasters primarily in terms of aggregate cost. Since 1990, the global population has increased by more than 2.2 billion, and the global economy has more than doubled in size. This means more lives and wealth are at risk with each successive disaster.

Despite this increased exposure, disasters are claiming fewer lives. Data tracked by Our World in Data shows that from 2007-17, an average of 70,000 people each year were killed by natural disasters. In the decade 50 years earlier, the annual figure was more than 370,000. Seventy thousand is still far too many, but the reduction represents enormous progress.

The material cost of disasters also has decreased when considered as a proportion of the global economy. Since 1990, economic losses from disasters have decreased by about 20% as a proportion of world-wide gross domestic product. The trend still holds when the measurement is narrowed to weather-related disasters, which decreased similarly as a share of global GDP even as the dollar cost of disasters increased.

For the full commentary, see:

Roger Pielke Jr. “Some Good News—About Natural Disasters, of All Things; In half a century, the average number of annual fatalities declined more than 80%.” The Wall Street Journal (Saturday, Aug. 4, 2018): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Aug. 3, 2018, and has the same title as the print version.)

Pielke’s op-ed piece quoted above, is related to his book:

Pielke, Roger, Jr.. The Rightful Place of Science: Disasters & Climate Change. Tempe, AZ: Consortium for Science, Policy & Outcomes, 2018.

“Nimble” Entrepreneurs May Succeed at Fusion, Where Government “Behemoths” Have Failed

(p. B1) The fusing of hydrogen atoms requires incredible heat and pressure, and for decades fusion research has been the exclu-(p. B7)sive province of big science, like ITER, a 35-nation thermonuclear project in the south of France that covers 100 acres and is expected to ultimately cost more than $20 billion.

Such initiatives, though, have made slow progress toward the ultimate goal of building a machine that generates more power than it takes in.

Fusion is now attracting science-minded entrepreneurs and investors willing to make a long bet. They see small companies as more nimble than government-funded behemoths. They are sensitive to rising alarms over the impact of climate change. They want to create a power source with enviable possibilities: millions of times the energy potential of oil and gas and substantially more than nuclear power, without the carbon emissions of fossil fuels.

Fusion proponents also say that it is free of most of the risks of contemporary nuclear plants — which are powered by splitting, not joining, atoms — and that it has advantages over wind and solar, whose output is variable and whose turbines and panels require enormous space.

“There is no doubt in my mind that humanity will eventually succeed in making fusion energy happen,” said Robin Grimes, a professor of physics at Imperial College, a public research university in London. “We’ve got no choice.”

For the full story, see:

Stanley Reed. “Fusion Powers the Sun. Can It Run Your Oven?” The New York Times (Tuesday, May 14, 2019): B1 & B7.

(Note: the online version of the story has the date May 13, 2019, and has the title “The Fusion Reactor Next Door.”)

“Rand’s Entrepreneur Is the Promethean Hero of Capitalism”

(p. B1) Few, if any, literary philosophers have had as much influence on American business and politics as Ayn Rand, especially now that Donald J. Trump occupies the White House.

President Trump named Rand his favorite writer and “The Fountainhead” his favorite novel. Secretary of State Rex W. Tillerson has cited “Atlas Shrugged” as a favorite work, and the C.I.A. director, Mike Pompeo, said the book “really had an impact on me.”

. . .

(p. B2) In business, Rand’s influence has been especially pronounced in Silicon Valley, where her overarching philosophy that “man exists for his own sake, that the pursuit of his own happiness is his highest moral purpose, that he must not sacrifice himself to others, nor sacrifice others to himself,” as she described it in a 1964 Playboy interview, has an obvious appeal for self-made entrepreneurs. Last year Vanity Fair anointed her the most influential figure in the technology industry, surpassing Steve Jobs.

. . .

“Rand’s entrepreneur is the Promethean hero of capitalism,” said Lawrence E. Cahoone, professor of philosophy at the College of the Holy Cross, whose lecture on Rand is part of his Great Courses series, “The Modern Political Tradition.” “But she never really explores how a dynamic entrepreneur actually runs a business.”

. . .

“Mention Ayn Rand to a group of academic philosophers and you’ll get laughed out of the room,” Mr. Cahoone said. “But I think there’s something to be said for Rand. She takes Nietzschean individualism to an extreme, but she’s undeniably inspirational.”

As the mysterious character John Galt proclaims near the end of “Atlas Shrugged”: “Do not let your fire go out, spark by irreplaceable spark, in the hopeless swamps of the approximate, the not-quite, the not-yet, the not-at-all. Do not let the hero in your soul perish, in lonely frustration for the life you deserved, but have never been able to reach. Check your road and the nature of your battle. The world you desired can be won, it exists, it is real, it is possible, it’s yours.”

For the full commentary, see:

James B. Stewart. “COMMON SENSE; Tough Times For Disciples Of Ayn Rand.” The New York Times (Friday, July 14, 2017): B1-B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 13, 2017, and has the title “COMMON SENSE; As a Guru, Ayn Rand May Have Limits. Ask Travis Kalanick.”)

Ayn Rand’s magnum opus, quoted above, is:

Rand, Ayn. Atlas Shrugged. New York: Random House, 1957.

At Atari, Dabney Was the Inventor and Bushnell Was the Entrepreneur

(p. B14) Samuel F. Dabney, an electrical engineer who laid the groundwork for the modern video game industry as a co-founder of Atari and helped create the hit console game Pong, died on May 26 [2018] at his home in Clearlake, Calif.

. . .

Mr. Dabney, known as Ted, brought arcade video games to the world with Atari, a start-up that he and a partner, Nolan Bushnell, founded in Sunnyvale, Calif., in the early 1970s.

. . .

He shared an office at Ampex with Mr. Bushnell, a charismatic engineer who had helped pay his way through college as a carnival barker. Mr. Bushnell was struck by Mr. Dabney’s pure love of engineering.

“He was just all about ‘Let’s get it done,’ ” Mr. Bushnell said in an interview this week. “He was the kindest. He didn’t have an ego.” Continue reading “At Atari, Dabney Was the Inventor and Bushnell Was the Entrepreneur”

Venture Capital Can Force Startups to Grow Too Fast

(p. 8) . . . for every unicorn, there are countless other start-ups that grew too fast, burned through investors’ money and died — possibly unnecessarily. Start-up business plans are designed for the rosiest possible outcome, and the money intensifies both successes and failures. Social media is littered with tales of companies that withered under the pressure of hypergrowth, were crushed by so-called “toxic V.C.s” or were forced to raise too much venture capital — something known as the “foie gras effect.”

Now a counter movement, led by entrepreneurs who are jaded by the traditional playbook, is rejecting that model. While still a small part of the start-up community, these founders have become more vocal in the last year as they connect venture capitalists’ insatiable appetite for growth to the tech industry’s myriad crises.

. . .

. . . founders have decided the expectations that come with accepting venture capital aren’t worth it. Venture investing is a high-stakes game in which companies are typically either wild successes or near total failures.

“Big problems have occurred when you have founders who have unwillingly or unknowingly signed on for an outcome they didn’t know they were signing on for,” said Josh Kopelman, a venture investor at First Round Capital, an early backer of Uber, Warby Parker and Ring.

. . .

But people like Sandra Oh Lin, the chief executive of KiwiCo, a seller of children’s activity kits, say that more money isn’t necessary. Ms. Oh Lin raised a little over $10 million in venture funding between 2012 and 2014, but she is now rebuffing offers of more just as her company has hit on a product people want — the very moment when investors would love to pour more gas on the fire. KiwiCo is profitable and had nearly $100 million in sales in 2018, a 65 percent increase over the prior year, Ms. Oh Lin said.

“We are aggressive about growth, but we are not a company that chases growth at all costs,” Ms. Oh Lin said. “We want to build a company that lasts.” Continue reading “Venture Capital Can Force Startups to Grow Too Fast”

“You Don’t Venture into the Wilderness Expecting to Find a Paved Road”

(p. 40) I, . . . , always considered the heart a pump, much the way a doctor explained it to Sandeep Jauhar during his cardiology fellowship. “In the end,” the doctor said, “cardiology is mostly a problem of plumbing.”

Jauhar quickly learned otherwise. His gripping new book, “Heart: A History,” had me nearly as enthralled with this pulsating body part as he seems to be. The tone — a physician excited about his specialty — takes a sharp turn from his first two memoirs. The first, “Intern,” was filled with uncertainty; the second, “Doctored,” with disillusionment.

. . .

We go into an operating room where a young girl is having open-heart surgery, tethered to a heart-lung machine. Then we learn that the concept for this machine began with one doctor’s brazen idea of connecting a patient to another person’s blood supply. He was inspired by the way a fetus feeds off its mother. Six of seven cases ended with a death.

Eventually, the heart-lung machine replaced the volunteers. The machine got off to a rough start too: 17 of the first 18 patients died. As one of the mid-20th-century researchers remarked, “You don’t venture into the wilderness expecting to find a paved road.”

Continue reading ““You Don’t Venture into the Wilderness Expecting to Find a Paved Road””

Your Passion Is Not “Found,” It Is Developed with “Time, Effort and Investment”

(p. B7) People “often assume that their own interest or passion just needs to be ‘found’ or revealed. Once revealed, it will be in a fully formed state,” said Paul A. O’Keefe, an assistant professor of psychology at Yale-NUS College in Singapore. Nonsense, of course, he said.

“By that logic, pursuing one’s passion should come with boundless motivation and should be relatively easy,” he said.

Dr. O’Keefe was part of a team that published a study in 2018 that examined how two different “implicit theories of interest” impacted how people approach new potential passions. One, the fixed theory, says that our interests are relatively fixed and unchanging, while the other, the growth theory, suggests our interests are developed over time and not necessarily innate to our personality.

In other words: Do we truly find our passions, or develop them over time? (You can probably guess where this is going.)

The researchers found that people who hold a fixed theory had less interest in things outside of their current interests, were less likely to anticipate difficulties when pursuing new interests, and lost interest in new things much quicker than people who hold a growth theory. In essence, people with a growth mind-set of interest tend to believe that interests and passions are capable of developing with enough time, effort and investment.

“This comes down to the expectations people have when pursuing a passion,” Dr. O’Keefe said. “Someone with a fixed mind-set of interest might begin their pursuit with lots of enthusiasm, but it might diminish once things get too challenging or tedious.”

Passion alone won’t carry you through in the face of difficulty, he said, when overcoming those challenges actually counts.

For the full story, see:

Stephanie Lee. “Finding Your Passion’ Takes Some Work.” The New York Times (Monday, May 6, 2019): B7.

(Note: the online version of the story has the date April 21 [sic], 2019, and has the title “Why ‘Find Your Passion’ Is Such Terrible Advice.”)

The academic article discussed above, is:

O’Keefe, Paul A., Carol S. Dweck, and Gregory M. Walton. “Implicit Theories of Interest: Finding Your Passion or Developing It?” Psychological Science 29, no. 10 (Oct. 2018): 1653-64.