Entrepreneurship – Page 76 – artdiamondblog.com

Rage at Malfunction Led to Invention

(p. B15) A business contemporary of Raymond A. Kroc, who built the McDonald’s chain into the industry leader, Mr. Edgerton started Burger King with $12,000 after managing Howard Johnson’s restaurants in Miami and Orlando, Fla.
. . .
In a 1998 memoir, “The Burger King: Jim McLamore and the Building of an Empire,” Mr. McLamore described Mr. Edgerton as a creative conceptual thinker but also as someone who “never focused very much on details, particularly those concerning financial matters.”
Early on, Mr. Edgerton estimated that profits were running at an eye-popping 28 percent of sales. But the “books” he was looking at turned out to be an assortment of papers stuffed into a peach basket showing that Insta Burger had actually lost money in its first few months.
It was hard for the partners at first. “We were losing our butts,” Mr. Edgerton said in a 2014 interview for this obituary. Paying himself $50 a week, he added, “We starved together.”
A major problem was the frequent breakdowns of the Rube Goldberg-like Insta broiler they had inherited. One day, Mr. McLamore wrote, “the machine began to malfunction just at the moment Dave was standing in front of it,” and the grinding of its metal parts sent him into a rage.
By Mr. McLamore’s account, Mr. Edgerton “reached into his toolbox and grabbed a hatchet” and sank it into the stainless steel mechanism, destroying it. He then shouted, red-faced, “I can build a better machine than this pile of junk!”
Three weeks later, Mr. Edgerton and a mechanic who ran a machine shop had produced a continuous-chain broiler, which would set a standard for all Burger King broilers and become a model for equipment in the industry.
. . .
The business took off, and by 1967 it had more than 400 units in about 20 states, particularly in the East and California, as well as in a few other countries. Its success drew an offer from the Pillsbury Company to buy Burger King.
“I really didn’t want to sell out,” Mr. Edgerton said, but he went along because he had found Mr. McLamore to be “a golfer first and foremost” who wanted more time to indulge his passion and who had no real need to keep working, being married to a woman of wealth.
. . .
He complained that the company, which had a series of jolting ups and downs over subsequent decades, let its menu get too big, and that its plethora of chief executives — “bookkeepers,” he called them — had rarely had experience in the restaurant business.
Asked in the 2014 interview if he regretted walking away from an industry on the verge of a boom that could have made him a billionaire, he pondered the question for a moment and then said, “That’s hindsight.”

For the full obituary, see:
Robert D. Hershey Jr. “David Edgerton, 90, a Burger King Founder Who Sold His Stake for a Bargain, Dies.” The New York Times (Tuesday, April 17, 2018): B15.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the obituary has the date April 16, 2018, and has the title “David Edgerton, a Founder of Burger King, Is Dead at 90.”)

The memoir mentioned above, is:
McLamore, James W. The Burger King: Jim McLamore and the Building of an Empire. New York: McGraw-Hill, 1997.

Stephen Moore Offers Advance Praise for Openness to Creative Destruction

An invaluable reminder that all human progress derives from innovation, entrepreneurship and inventiveness. Wealth creation depends on creative destruction.

Stephen Moore, economist at the Heritage Foundation, economics commentator on CNN. Co-author of It’s Getting Better All the Time, and other works.

Moore’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.

Openness to Creative Destruction: Sustaining Innovative Dynamism

My book Openness to Creative Destruction: Sustaining Innovative Dynamism, is forthcoming from Oxford University Press in June 2019.
The book shows how life has improved through innovation, how innovation has occurred through the efforts of inventors and innovative entrepreneurs, how workers on balance benefit from a system of innovative dynamism, and how policies can be crafted to encourage the innovative entrepreneur to bring us more innovations.
A PDF of a handout that includes the current draft of the Table of Contents of my book can be found on the first page of artdiamond.com.
Several scholars have graciously looked at an advance copy of my book, and offered me early praise for it. During the next several weeks I occasionally will present some of their comments. (These will be presented roughly in the order in which I received them.)

Videogames Help ADHD Children

(p. A9) It isn’t often that children are encouraged to play videogames.
But a group of Boston Children’s Hospital researchers have developed videogames for children with conditions such as attention deficit hyperactivity disorder (ADHD) and anxiety, or those who just need to learn how to control their emotions better.
The videogames track a child’s heart rate, displayed on the screen. The games get increasingly difficult as the player’s heart rate increases. To be able to resume playing without extra obstacles the child has to calm themselves down and reduce their heart rate.
“What we’re trying to do is build emotional strength for kids,” said Jason Kahn, co-founder and chief scientific officer of Mighteor, a Boston-based company and spinoff of Boston Children’s Hospital. BCH runs an accelerator and funded some of the research and development of the products. They retain a small piece of ownership of Mighteor. Dr. Kahn worked as a developmental psychologist at Boston Children’s for seven years and maintains an affiliation there but launched the company in November [2016].
The games help children “build muscle memory,” he said. So once they are able to reduce their heart rate over and over again the response of physiologically calming themselves down becomes more automatic.

For the full story, see:
Sumathi Reddy. “‘When Videogames Can Help.” The Wall Street Journal (Tuesday, July 18, 2017): A9.
(Note: bracketed year added.)
(Note: the online version of the story has the date July 17, 2017, and has the title “YOUR HEALTH; When Children Can Benefit From Playing Videogames.”)

When Government Mandates a Technology

(p. A20) In 2011, after a lengthy competition among automakers, Mayor Michael R. Bloomberg announced that the Nissan NV200 would become the “Taxi of Tomorrow” with most yellow cab owners required to purchase the boxy, bright yellow van. Eventually, the vehicle was expected to make up 80 percent of New York City’s fleet of over 13,000 cabs.
At the time, city officials touted the NV200’s increased leg room, USB charging ports and sunroof as amenities that would be attractive to riders who had long complained about cramped travel in less than spotless back seats.
But it turns out that tomorrow lasted only seven years.
Last week, the Taxi and Limousine Commission reversed the requirement, expanding the option for drivers beyond the Nissan NV200 to a smorgasbord of over 30 vehicles, including popular, fuel efficient models like the Toyota Camry.
. . .
. . . there are drivers like Sergio Cabrera, 60, who owns his vehicle and the expensive medallion needed to have it on the road, who said the NV200 has given him many headaches.
. . .
“There hasn’t been a worse car for the taxi industry than the NV200,” he said. “It’s not easy for older people to get into. Mechanically it’s one of the worst made cars I’ve ever owned.”
Mr. Cabrera complained that owning the Nissan has been expensive, in part because of regulations that he and other yellow cabdrivers say subjects them to more maintenance rules than drivers for ridesharing apps.
The Taxi and Limousine Commission requires yellow taxis to undergo a 200-point inspection every four months. Each time his Nissan has been inspected, Mr. Cabrera said he has had to shell out at least $1,500 in repairs in order to pass.

For the full story, see:
Tyler Blint-Welsh. “Time Is Up for ‘Taxi of Tomorrow’.” The New York Times (Wednesday, June 13, 2018): A20.
(Note: ellipses added.)
(Note: the online version of the story has the date June 12, 2018, and has the title “It Was Billed as the ‘Taxi of Tomorrow.’ Tomorrow Didn’t Last Long.”)

Some Brain Traits Ease Music Learning

(p. C2) A study published in Cerebral Cortex in July [2015] shows that unusual activity in specific neural areas can predict how easily musicians learn their chops.
. . .
The data . . . point to a distinct starting advantage in some people–and where that advantage might reside in the brain. A retroactive examination of the first fMRI images predicted who would be the best learners.
Those with a hyperactive Heschl’s gyrus (part of the cerebral cortex that is associated with musical pitch) and with lots of reactivity in their right hippocampus (an area linked to auditory memory) turned out to be more likely to remember tunes they had heard before and, after some practice, play them well.
The “kicker,” said Dr. Zatorre, was finding that neural head start. “That gives you an advantage when you’re learning music, and it’s a completely different system from the parts of the brain that show learning has taken place. It speaks to the idea of 10,000 hours.” In his book “Outliers,” Malcolm Gladwell called 10,000 hours of practice “the magic number of greatness.” Dr. Zatorre disagrees, saying, “Is it really fair to say that everyone’s brain is structured the same way, and that if you practice, you will accomplish the same thing?”

For the full commentary, see:
Susan Pinker. “Practice Makes Some Perfect, Others Maybe Not.” The Wall Street Journal (Saturday, Aug. 29, 2015): C2.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the commentary has the date Aug. 26, 2015.)

The print version of the Cerebral Cortex article discussed above, is:
Herholz, Sibylle C., Emily B. J. Coffey, Christo Pantev, and Robert J. Zatorre. “Dissociation of Neural Networks for Predisposition and for Training-Related Plasticity in Auditory-Motor Learning.” Cerebral Cortex 26, no. 7 (July 1, 2016): 3125-34.

The Gladwell book mentioned above, is:
Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.

High-Tech Toilets Could Reduce Feces in Swimming Pools

If the cringeworthy facts reported below were more widely known, demand would greatly increase for the high-tech toilets common in Japan, that shoot water sprays at human rear ends, to quickly, comfortably, and completely remove fecal residue. Why has no one grasped this entrepreneurial opportunity?

(p. A2) Mrs. [Lindsey] Blackstock and several colleagues tested 31 swimming pools and hot tubs in hotels and recreational facilities in Canada for the presence of acesulfame potassium, an artificial sweetener that is largely undigested and almost entirely excreted in urine.
. . .
Using that information, they deduced that a 110,000-gallon pool they studied contained an estimated eight gallons of urine, while a 220,000-gallon pool contained an estimated 20 gallons. The concentrations represented about 0.01% of the total water volume.
“If your eyes are turning red when you’re swimming, or if you’re coughing or have a runny nose, it’s likely there is at least some urine in the pool,” said Michele Hlavsa, chief of the Healthy Swimming Program for the Centers for Disease Control and Prevention.
Urine isn’t a primary source of germs in pools or hot tubs, but feces that clings to the body is. At any time, Dr. Hlavsa said, adults have about 0.14 grams of poop on their bottoms and children have as much as 10 grams.
“When you’re talking about bigger water parks with 1,000 children in a given day, you’re now talking about 10 kilograms or 22 pounds of poop,” she said.
Feces can contain bacteria, viruses and parasites such as E. coli, norovirus and giardia that can lead to outbreaks of diarrhea, vomiting and other illnesses.

For the full commentary, see:
Jo Craven McGinty. “THE NUMBERS; A Sanitary Pool Requires Proper Behavior.” The Wall Street Journal (Saturday, July 21, 2017): A2.
(Note: ellipsis, and bracketed name, added.)
(Note: the online version of the commentary has the date July 21, 2017, and has the title “THE NUMBERS; Is That Pool Really Sanitary? New Chemical Approach Has Answers.”)

Blackstock’s research, described above, was published in:
Jmaiff Blackstock, Lindsay K., Wei Wang, Sai Vemula, Benjamin T. Jaeger, and Xing-Fang Li. “Sweetened Swimming Pools and Hot Tubs.” Environmental Science & Technology Letters 4, no. 4 (April 2017): 149-53.

Tusk Helped Startups Enter by Mobilizing Consumers Who Would Benefit

(p. C6) In August [2018], Mayor Bill de Blasio signed a package of bills capping the number of cars driving in New York City for companies like Uber and Lyft and setting minimum pay for drivers. The mayor had long wanted such restrictions, but for years Uber had successfully pushed back, thanks in large part to strategist and venture capitalist Bradley Tusk.
“The problem is not only did this happen in New York, but now it’s going to happen everywhere,” laments Mr. Tusk, who worked as a consultant for Uber Technologies from 2010 to 2015, earning equity that was eventually worth around $100 million. Under his guidance, Uber mobilized its users to lobby against the legislation and made the case that its service provided transportation to people in the outer boroughs and jobs to immigrants and minorities.
. . .
Since working for Uber, Mr. Tusk has helped other tech companies in similar political battles. As he sees it, politicians too often sacrifice their constituents’ economic interests for their own political gain. “What’s good for politician X isn’t necessarily good for the businesses in his or her district,” he says. “Without at least some people like us, innovation gets crushed by politics and corruption and that’s really bad for the economy and for society.”
. . .
After serving as campaign manager of Mr. Bloomberg’s reelection effort, in 2010 Mr. Tusk founded Tusk Strategies with the goal of running campaigns for companies and institutions rather than politicians. At the time, Walmart was looking for a way to enter markets without pushback from powerful unions. Mr. Tusk urged city councils, including New York’s, to stop blocking its entry by polling customers, launching television ads and mobilizing constituents who wanted the choice of shopping at Walmart.
Then one of Mr. Bloomberg’s former deputy mayors called him with a proposition: “There’s this guy with a small transportation startup. He’s having some regulatory problems. Would you mind talking to him?” It was Uber. The New York City Taxi and Limousine Commission had sent Uber a cease and desist letter, and its then-CEO Travis Kalanick needed someone who understood New York politics. Mr. Tusk mounted successful campaigns on behalf of the company in New York and other cities, including Washington, D.C., and Los Angeles.
. . .
Does he see himself as an example of the revolving door between politics and business? “I’m absolutely using the savvy I learned in the political world–just in a different way than most,” he says. But he has no intentions of ever returning to government. “I felt like I could force more change on the system from the outside,” he says. “Not only am I not doing politics, but most of my work is making politicians crazy.”

For the full interview, see:
Alexandra Wolfe, interviewer. “”WEEKEND CONFIDENTIAL; Bradley Tusk from Political Insider to ‘Fixer’ for Tech.” The Wall Street Journal (Saturday, Sept. 1, 2018): C6.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the interview has the date Aug. 31, 2018, and the title “WEEKEND CONFIDENTIAL; How Bradley Tusk Went from Political Insider to ‘Making Politicians Crazy’.”)

The book under discussion above, is:
Tusk, Bradley. The Fixer: My Adventures Saving Startups from Death by Politics. New York: Portfolio, 2018.

Entrepreneur Carr’s Philanthropy Harmed Mozambique

(p. C6) It is an old, old story. A wealthy man comes to town, promising change and a brighter future. He’s the expert. He knows best. Inevitably, it doesn’t exactly work out that way.
Stephanie Hanes, an American correspondent for the Christian Science Monitor, spent three years watching one particular version of that fairy tale unfold in central Mozambique.
The wealthy man was Greg Carr. An Idahoan, Mr. Carr had made millions first by selling voice-mail systems and then by running Prodigy, an early internet service provider. At age 40, he turned to philanthropy . . .
. . .
In “White Man’s Game,” Ms. Hanes outlines, in a nonpolemical way, the long history of Western involvement in Africa’s wilderness.
. . .
Turning to the present day, Ms. Hanes takes World Wildlife Fund, Nature Conservancy and other Western groups–known as Big Green–to task for their conservation colonialism.
. . .
She . . . points out that they are a bit cynical. “The conservation industry mirrors the humanitarian assistance industry,” she writes, “with alarmist pledge drives, heart-stirring photos and admonitions to ‘act now!’–all to be repeated for the next grant cycle.”
. . .
It is clear from Ms. Hanes’s account that a complex interplay of social, political and economic matters affected Gorongosa, not just one man’s ambition. The imported elephants inevitably roamed outside the park and into nearby towns, damaging crops and perhaps killing a villager. Mr. Carr’s tree planting, a laudable goal on the surface, was seen negatively by the people there because, culturally, tree planting was a way of marking one’s territory. When visiting a prominent local leader, Mr. Carr arrived in a red helicopter, oblivious to the fact that, in Gorongosi culture, red is the color of violence. For locals, Mr. Carr was the latest in a long line of outsiders invading their land. He destabilized rather than restored.
In the West, Mr. Carr’s work catalyzed praise: a glossy piece on Gorongosa in National Geographic by the noted biologist E.O. Wilson, a profile in the New Yorker. But the reality on the ground was different. Few tourists came to Gorongosa, and a flare-up of civil-war tensions led to violence. Overall the 150,000 Mozambicans who lived in the district, according to Ms. Hanes, saw little measurable improvement in their lives. Park staff even tortured suspected poachers.
In the most powerful scene in the book Ms. Hanes observes Mr. Carr and his associates staring at a map of Mozambique and contemplating expanding the park borders to incorporate a vast swath of land so that animals could migrate again. They wanted to rewild central Mozambique. It was just another example of the “generations of white man standing around maps,” observes Ms. Hanes. They never mentioned the millions of people who lived in those lands.

For the full review, see:
James Zug. “The Do-Gooders’ Playground.” The Wall Street Journal (Saturday, Aug. 5, 2017): C6.
(Note: ellipses added.)
(Note: the online version of the review has the date Aug. 4, 2017.)

The book under review, is:
Hanes, Stephanie. White Man’s Game: Saving Animals, Rebuilding Eden, and Other Myths of Conservation in Africa. New York: Metropolitan Books, 2017.

Inventor of Fiber Optics “Didn’t Believe What Experts Said”

(p. A9) In the 1960s, Charles Kao often annoyed his wife, Gwen, by coming home late for dinner.
Dr. Kao, a refugee from the Chinese Communist revolution, told her his research for a British subsidiary of International Telephone & Telegraph Corp. could change the world one day.
. . .
In a 1966 paper written with George Hockham, he outlined the potential for using pulses of light to carry huge volumes of voice and data signals long distances through strands of glass that became known as optical fibers. Few took him seriously until several years later, when Corning Glass Works found ways to do just that.
. . .
Dr. Kao was once asked how long fiber optics would be used. Nothing better was likely to come along for 1,000 years, he said. “But don’t believe what I say,” he added, “because I didn’t believe what experts said either.”

For the full obituary, see:
James R. Hagerty. “‘Early Bet on Optical Fibers Yielded Pipes for Internet.” The New York Times (Saturday, Sept. 29, 2018): A9.
(Note: ellipses added.)
(Note: the online version of the obituary has the date Sept. 28, 2018, and has the title “‘Chinese Refugee Developed Fiber-Optic Technology That Made the Internet Possible.”)

In 10 Years after iPhone, Apple Added Almost 100,000 Jobs

Source of graph: online version of the WSJ article quoted and cited below.

(p. B1) SAN FRANCISCO–Since Apple Inc. launched the iPhone in June 2007, the smartphone revolution it unleashed has changed the way people work and socialize while reshaping industries from music to hotels.
It also has transformed the company in ways that co-founder Steve Jobs could hardly have foreseen.
Ten years later, the iPhone is one of the best-selling products in history, with about 1.3 billion sold, generating more than $800 billion in revenue. It skyrocketed Apple into the business stratosphere, unlocking new markets, spawning an enormous services business and helping turn Apple into the world’s most valuable publicly traded company.
. . .
(p. B8) . . . , Apple didn’t open the device to application developers until 2008, when it added the App Store and began taking 30% of each app purchase.
Since then, app sales have generated roughly $100 billion in gross revenue as Apple has registered more than 16 million app developers world-wide.
. . .
As sales surged, Apple staffed up. The company hired about 100,000 people in the 10-year span, bringing its global workforce to 116,000 from 18,000 in 2006. New workers were brought on to manage relationships with cellphone carriers, double the number of retail stores and maintain an increasingly complex supply chain.

Source of graph: online version of the WSJ article quoted and cited below.

For the full story, see:
Tripp Mickle. “‘How iPhone Decade Reshaped Apple.” The Wall Street Journal (Wednesday, June 21, 2017): B1 & B8.
(Note: ellipses added.)
(Note: the online version of the story has the date June 20, 2017, and has the title “Among the iPhone’s Biggest Transformations: Apple Itself.”)