Category: Entrepreneurship

Startups ‘Push the Flywheel’ Longer than They Admit

(p. A8) Some startups that spend years developing their product say the clock doesn’t start with those years. They count time from the day they came upon a solution that worked–never mind time spent looking for ideas or toiling at approaches that failed.
Milpitas, Calif.-based View Inc., which makes window glass that changes tint electronically, incorporated as Echromics and was in development as early as 2007. When its first technical approach failed, almost the entire staff turned over, said CEO Rao Mulpuri. He took over in December 2008.
A spokeswoman says the company considers 2009–the year it made breakthroughs that made its product possible–as the year it “really started its journey.” The company changed its name to View in 2012.
When it comes to the question of founding a company, Mr. Mulpuri says, “there’s a technical answer, which is the official answer. When was the company founded in the state of Delaware? But as a team, it’s not as simple as that.”
Silicon Valley investors are used to the idea that a “pivot” or new name takes off the years like a shot of Botox–though not all are thrilled.
David Gurle, chief executive of Palo Alto, Calif.-based Symphony Communication Services LLC, isn’t amused by startups that play the age game.
He founded private-messaging startup Perzo in 2012. After Symphony, another startup, acquired it in 2014, it began targeting financial-services clients. He proudly cites 2012 as Symphony’s founding year, despite its permutations.
“If you told me that a flower only started growing when it was out of the earth, then I would say, ‘No, it’s already been growing,'” Mr. Gurle said.

For the full story, see:
Patience Haggin. “Forever Young: Tech Startups, Like Hollywood Celebrities, Fudge Their Age; To look like overnight successes, new companies are playing around with their origin stories.” The Wall Street Journal (Sat., Aug. 12, 2017): A1 & A8.
(Note: the online version of the story has the date Aug. 11, 2017, and has the title “The Secret to Startup Success? Fudge Your Age; To look like overnight successes, new companies are playing around with their origin stories.” The passages quoted from the online version, above, are about a sentence and a half longer than the similar passages in the print version.)

After 30 Years, Medical Entrepreneur Rosenberg’s Slow Hunch Pays Off

(p. B3) In the another significant development, the cancer institute’s prominent cancer researcher and chief of surgery, Steven A. Rosenberg, detailed for the first time an immunotherapy success against metastatic breast cancer, in a talk earlier this month.
In the lecture at a Boston meeting of the American Association of Cancer Research, Dr. Rosenberg reported on the first patient with metastatic breast cancer who is disease-free nearly two years after her first immunotherapy treatment. In the therapy, a person’s own cells are multiplied billions of times and reinfused into the patient. Dr. Rosenberg’s lab has already reported successes in treatment of melanoma, lymphoma, colorectal cancer and bile-duct cancer.
That patient is Judy Perkins, a 51-year-old structural engineer from Port St. Lucie, Fla. She was diagnosed with metastatic cancer–cancer that spread beyond the original location–in 2013.
. . .
Ms. Perkins is only one case. But the fact that she had metastatic breast cancer that is no longer detectable makes it very consequential. It follows reports from the Rosenberg lab about other internal-organ cancers, specifically colorectal and bile-duct.
. . .
Dr. Rosenberg’s interest in immunotherapy was piqued three decades ago, when he was struck by a chance encounter with a stomach-cancer patient who improbably recovered despite no treatment. This became a lifelong quest to discover how that patient had in effect cured himself. Scores of recoveries at the cancer institute of melanoma and lymphoma patients followed after immunotherapy treatment from his lab.
Now, his lab is exploring the promise of treating and accomplishing tumor regressions in far-more-common solid-tumor cancers of internal organs, including the breast, colon and bile-duct.

For the full story, see:
Thomas M. Burton. “Immunotherapy Treatments for Cancer Gain Momentum.” The Wall Street Journal (Fri., Oct. 13, 2017): B3.
(Note: ellipses added.)
(Note: the online version of the story has the date Oct. 12, 2017.)

Reinvesting Profits Enables the Scaling Up of Success

(p. A17) Muhammad Yunus has big goals: zero world poverty, zero unemployment and zero net carbon emissions.
. . .
Mr. Yunus has long been a hero of mine for his innovative faith in the resourcefulness of low-income people.
. . .
If you want to motivate support for social enterprise, a utopian promise of “A World of Three Zeros” makes for a better book title than “Helping 60 Albanian Farmers Grow Herbs.” And Mr. Yunus’s paean to entrepreneurship does indeed deliver inspiration about the power of human creativity. But problematic arguments remain, especially his imprecise criticisms of the current economic system and the implausibility of replacing the whole system with social entrepreneurship.
A major problem is one of scale. Mr. Yunus’s many social-enterprise examples are all on the same micro level as the 60 Albanian herb farmers. And while there’s nothing wrong with making a large number of small-scale efforts to help a great many people, it doesn’t qualify as a whole new system for the $76 trillion global economy. Mr. Yunus doesn’t confront the scaling problem. He could have noted, for instance, that successful social entrepreneurs, unlike successful private entrepreneurs, by definition don’t get the high profits to reinvest in scaling up successes.

For the full review, see:
William Easterly. “BOOKSHELF; How to Solve Global Poverty.” The Wall Street Journal (Sat., Oct. 3, 2017): A17.
(Note: ellipses added.)
(Note: the online version of the review has the date Oct. 2, 2017.)

The book under review, is:
Yunus, Muhammad. A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions. New York: PublicAffairs, 2017.

Musk Fires Under-Performing Workers to Speed Output of Mass-Market Electric Sedans

(p. B4) DETROIT — The electric-car maker Tesla fired hundreds of workers this week after a series of performance reviews conducted during the biggest expansion in the company’s history.
Tesla said Friday [Oct. 13, 2017] that the dismissals were not out of the ordinary, even though they came as the automaker tries to increase the production of its first mass-market vehicle, the Model 3 sedan.
The company has been criticized for the slow pace of its early production of the new model, which has generated hundreds of thousands of deposits from prospective buyers.
Tesla built about 25,000 vehicles in the three months that ended Sept. 30, but only 260 of those were Model 3s — considerably fewer than the 1,500 it had projected. The automaker has attributed the low production rate of the new car to unexpected bottlenecks in its manufacturing system.

For the full story, see:
BILL VLASIC. “Tesla Fires Hundreds of Workers.” The New York Times (Sat., OCT. 14, 2017): B4.
(Note: bracketed date added.)
(Note: the online version of the story has the date OCT. 13, 2017, and has the title “Tesla Fires Hundreds as It Tries to Speed Production of an Electric Sedan.”)

“The Regulations Are Absurd”

(p. A6) CIUDAD del ESTE, Paraguay–This remote South American country, long known for contraband traffickers and a 35-year dictatorship, is now becoming something else: a manufacturing hub.
Paraguay has attracted scores of foreign factories since 2013, as predominantly Brazilian companies respond to new incentives by flocking to this gritty border city to make everything from toys to motor scooters for export.
Koumei SA, a family-run Brazilian light-fixtures company, is typical. Its owners moved the plant and about 150 jobs here last year, saying they were fed up with Brazil’s high taxes and complicated labor rules.
“It’s just easier here,” said Seijii Abe, who directs the company with his father.
. . .
Brazil ranked 123rd out of 190 in the World Bank’s 2017 survey on ease of doing business, right behind Uganda and Egypt. Companies there say they are bedeviled by rules that smother entrepreneurial impetus. They point to labor regulations that make hiring and firing difficult, high energy bills, a legal system that encourages employee lawsuits and taxes of up to 35% on imported goods.
“The regulations are absurd,” said João Carlos Komuchena, owner of Kompar SA, a company which makes small plastic bottles used for packing soy sauce and other products that moved to Paraguay from Brazil last year. “We need to wake up in Brazil; there is a lot of prejudice against business.”

For the full story, see:
Jeffrey T. Lewis. “Businesses Flee Brazil Rules for Paraguay.” The Wall Street Journal (Mon., Aug. 28, 2017): A6.
(Note: ellipsis added.)
(Note: the online version of the story has the date Aug. 26, 2017, and has the title “Brazil’s Woes Multiply as Manufacturers Move to Paraguay.”)

Those with Full Bladders Are More Financially Prudent

(p. 12) The “your brain, warts and more warts” genre is well represented by the new book “Brain Bugs: How the Brain’s Flaws Shape Our Lives,” by Dean Buonomano, a neuroscientist at U.C.L.A.
. . .
. . . researchers have reported that subjects with full bladders exercised more self-control in a completely unrelated realm (financial decisions) than subjects who had been permitted to relieve themselves first — a finding that earned them this year’s Ig Nobel Prize in medicine, awarded annually to unusual or ridiculous-seeming scientific research.

For the full review, see:
CHRISTOPHER F. CHABRIS. “Think Again.” The New York Times Book Review (Sunday, October 16, 2011): 12-13.
(Note: ellipses added.)
(Note: the online version of the review has the date OCT. 14, 2011, and has the title “Is the Brain Good at What It Does?”)

The book under review, is:
Buonomano, Dean. Brain Bugs: How the Brain’s Flaws Shape Our Lives. New York: W. W. Norton & Company, 2011.

Will the Breakthrough Innovative Founder Always Overshadow His Successor?

JobsSteveAndTimCook2017-10-01.jpg“Ten years after Steve Jobs introduced the iPhone, Tim Cook, his successor, opened the latest Apple product launch.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B2) Mr. Jobs, who died in 2011, loomed over Tuesday’s nostalgic presentation. The Apple C.E.O., Tim Cook, paid tribute, his voice cracking with emotion, Mr. Jobs’s steeple-fingered image looming as big onstage as Big Brother’s face in the classic Macintosh “1984” commercial. Mr. Cook even revived Mr. Jobs’s patented “One more thing …” line, but reverentially: “We have great respect for these words, and we don’t use them lightly.”
. . .
Mr. Cook is an amiable presenter, but he doesn’t pretend to have Mr. Jobs’s magnetism.

For the full commentary, see:
JAMES PONIEWOZIK. “CRITIC’S NOTEBOOK; Selling Us a Better Vision of Ourselves.” The New York Times (Weds., SEPT. 13, 2017): B1-B2.
(Note: ellipsis internal to paragraph, in original; ellipsis between paragraphs, added.)
(Note: the online version of the commentary has the date SEPT. 12, 2017, and has the title “CRITIC’S NOTEBOOK; At the Apple Keynote, Selling Us a Better Vision of Ourselves.”)

On Private Property, Innovator “Can Try New Ideas Without as Much Red Tape”

(p. B1) SAN JOSE, Calif. — Molly Jackson, an 82-year-old retired nurse, was sitting in the back seat of a self-driving taxi when the vehicle jerked to a halt at a crossing as its computer vision spotted an approaching golf cart.
When the vehicle, a modified Ford Fusion developed by a start-up named Voyage, started to inch forward, it abruptly stopped again as the golfers pressed ahead and cut in front of the car.
Ms. Jackson seemed unfazed by the bumpy ride. As a longtime resident of the Villages Golf and Country Club, a retirement community in San Jose, Calif., she knew all about aggressive golf cart drivers.
“I like that; we made a good stop there,” Ms. Jackson said. “I stop for them. They say we don’t have to, but I do.”
. . .
The speed limit, just 25 miles an hour, helps reduce the risk if something goes wrong. And because it is private property, the company does not have to share ride information with regulators and it can try new ideas without as much red tape.
(p. B6) Cars that can drive themselves could be a great benefit to older people. Residents at the Villages say that once people stop driving, they often pull back from activities and interacting with friends.

For the full story, see:
DAISUKE WAKABAYASHI. “Where Cars Brake for Golf Carts.” The New York Times (Thurs., OCT. 5, 2017): B1 & B6.
(Note: ellipses added.)
(Note: the online version of the story has the date OCT. 4, 2017, and has the title “Where Driverless Cars Brake for Golf Carts.”)

Can “Radical Transparency” Work “in Today’s Polarized and Litigious World”?

(p. B1) In 1993, Ray Dalio, the chairman of what is today the largest hedge fund in the world, Bridgewater Associates, received a memo signed by his top three lieutenants that was startlingly honest in its assessment of him.
It was a performance review of sorts, and not in a good way. After mentioning his positive attributes, they spelled out the negatives. “Ray sometimes says or does things to employees which makes them feel incompetent, unnecessary, humiliated, overwhelmed, belittled, pressed or otherwise bad,” the memo read. “If he doesn’t manage people well, growth will be stunted and we will all be affected.”
To Mr. Dalio, the message was both devastating and a wake-up call. His reaction: “Ugh. That hurt and surprised me.”
That moment helped push Mr. Dalio to rethink how he approached people and to begin developing a unique — and sometimes controversial — culture inside his firm, one based on a series of “principles” that place the idea of “radical transparency” above virtually all else.
. . .
(p. B5) Of course, the larger question is whether Mr. Dalio’s version of utopia — a place where employees feel comfortable offering blunt and in some cases brutal feedback — can exist outside Bridgewater’s controlled environment of mostly self-selecting individuals who either embrace the philosophy or quickly exit. Given the intense environment, as you might expect, there are horror stories of employees who have left in tears. Turnover among new employees is high.
Mr. Dalio’s critics — and there are many — say his principles offer permission to be verbally barbaric, and they question whether the $160 billion firm’s success is a product of such “radical transparency” or whether he can afford such a wide-ranging social experiment simply because the firm is so financially successful.
In truth, it is hard to imagine how harsh individual critiques in the workplace can work at many other organizations in today’s polarized and litigious world, where people are increasingly looking for “safe spaces” and those who say they are offended by a particular argument are derided as “fragile snowflakes.”

For the full commentary, see:
Sorkin, Andrew Ross. “DEALBOOK; Bridgewater’s Ray Dalio Dives Deeper Into the ‘Principles’ of Tough Love.” The Wall Street Journal (Sat., Sept. 5, 2017): B1 & B5.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Sept. 4, 2017, and has the title, “DEALBOOK; Bridgewater’s Ray Dalio Dives Deeper Into the ‘Principles’ of Tough Love.” )

The Dalio book, discussed above, is:
Dalio, Ray. Principles: Life and Work. New York: Simon & Schuster, 2017.

Has Jeff Bezos Given Up on Well-Paying Jobs for Average Citizens?

I have not read Scott Galloway’s new book, but suspect that there will be much in it to disagree with. But he makes a thought-provoking, and plausible, point, in the passage below, quoted from a Galloway op-ed piece.

(p. C3) I recently spoke at a conference the day after Jeff Bezos. During his talk, he made the case for a universal guaranteed income for all Americans. It is tempting to admire his progressive values and concern for the public welfare, but there is a dark implication here too. It appears that the most insightful mind in the business world has given up on the notion that our economy, or his firm, can support that pillar of American identity: a well-paying job.

For the full commentary, see:
Scott Galloway. “Amazon Takes Over the World.” The Wall Street Journal (Sat., Sept. 23, 2017): C3.
(Note: the online version of the commentary has the date Sept. 22, 2017.)

The commentary, quoted above, is related to the author’s book:
Galloway, Scott. The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google. New York: Portfolio, 2017.

For Innovators to Seek the Way to San Jose, City’s Bureaucrats Should “Get Out of the Way”

The passages quoted below are authored by the Democratic mayor of the city of San Jose, California.

(p. A17) Recently, states and cities have been luring companies with subsidies. . . . The commonwealth of Massachusetts and city of Boston brought General Electric headquarters to Beantown with a $145 million incentive deal.
. . .
But my city won’t be offering incentives to Amazon. Why? Because they are a bad deal for taxpayers. With many subsidies, the jobs a company brings to an area don’t generate revenues commensurate with public expenditures. The GE deal will cost taxpayers more than $181,000 for every job created in Boston. Most experts insist that other factors–particularly the presence of a skilled workforce–play a far larger role in determining boardrooms’ corporate location decisions. Moreover, some 95% of Silicon Valley’s job growth comes from new small-business formation and when those homegrown companies develop into larger firms.
. . .
A healthy economic ecosystem that supports innovation and growth is what makes a community attractive to a company like Amazon.
. . .
As elected officials, we would do well to resist ribbon-cutting and take the longer view. To attract innovative employers, let’s all stay in our lanes, create safe and attractive cities for talented people to live in, and clear bureaucratic red tape. In other words: Get out of the way.

For the full commentary, see:

Sam Liccardo. “Why I’m Not Bidding for Amazon’s HQ; San Jose won’t offer subsidies for favored corporations, which are a bad deal for city taxpayers.” The Wall Street Journal (Thurs., Oct. 5, 2017): A17.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Oct. 4, 2017.)