May 2012 – Page 3 – artdiamondblog.com

Harvard and M.I.T. Free Online Courses May Disrupt Mid-Tier Universities

(p. A17) In what is shaping up as an academic Battle of the Titans — one that offers vast new learning opportunities for students around the world — Harvard and the Massachusetts Institute of Technology on Wednesday announced a new nonprofit partnership, known as edX, to offer free online courses from both universities.
Harvard’s involvement follows M.I.T.’s announcement in December that it was starting an open online learning project, MITx. Its first course, Circuits and Electronics, began in March, enrolling about 120,000 students, some 10,000 of whom made it through the recent midterm exam. Those who complete the course will get a certificate of mastery and a grade, but no official credit. Similarly, edX courses will offer a certificate but not credit.
But Harvard and M.I.T. have a rival — they are not the only elite universities planning to offer free massively open online courses, or MOOCs, as they are known. This month, Stanford, Princeton, the University of Pennsylvania and the University of Michigan announced their partnership with a new commercial company, Coursera, with $16 million in venture capital.
. . .
Education experts say that while the new online classes offer opportunities for students and researchers, they pose some threat to low-ranked colleges.
“Projects like this can impact lives around the world, for the next billion students from China and India,” said George Siemens, a MOOC pioneer who teaches at Athabasca University, a publicly supported online Canadian university. “But if I were president of a mid-tier university, I would be looking over my shoulder very nervously right now, because if a leading university offers a free circuits course, it becomes a real question whether other universities need to develop a circuits course.”

For the full story, see:
TAMAR LEWIN. “Harvard and M.I.T. Join to Offer Web Courses.” The New York Times (Thurs., May 3, 2012): A17.
(Note: ellipsis added.)
(Note: the online version of the story is dated May 2, 2012, and has the title “Harvard and M.I.T. Team Up to Offer Free Online Courses.”)

Four Million Former Californians Voted with Their Feet

Joel Kotkin. Source of image: online version of the WSJ article quoted and cited below.

(p. A13) ‘California is God’s best moment,” says Joel Kotkin. “It’s the best place in the world to live.” Or at least it used to be.
. . .
Nearly four million more people have left the Golden State in the last two decades than have come from other states. This is a sharp reversal from the 1980s, when 100,000 more Americans were settling in California each year than were leaving. According to Mr. Kotkin, most of those leaving are between the ages of 5 and 14 or 34 to 45. In other words, young families.
. . .
“Basically, if you don’t own a piece of Facebook or Google and you haven’t robbed a bank and don’t have rich parents, then your chances of being able to buy a house or raise a family in the Bay Area or in most of coastal California is pretty weak,” says Mr. Kotkin.
. . .
And things will only get worse in the coming years as Democratic Gov. Jerry Brown and his green cadre implement their “smart growth” plans to cram the proletariat into high-density housing. “What I find reprehensible beyond belief is that the people pushing [high-density housing] themselves live in single-family homes and often drive very fancy cars, but want everyone else to live like my grandmother did in Brownsville in Brooklyn in the 1920s,” Mr. Kotkin declares.
“The new regime”–his name for progressive apparatchiks who run California’s government–“wants to destroy the essential reason why people move to California in order to protect their own lifestyles.”
Housing is merely one front of what he calls the “progressive war on the middle class.” Another is the cap-and-trade law AB32, which will raise the cost of energy and drive out manufacturing jobs without making even a dent in global carbon emissions. Then there are the renewable portfolio standards, which mandate that a third of the state’s energy come from renewable sources like wind and the sun by 2020. California’s electricity prices are already 50% higher than the national average.
Oh, and don’t forget the $100 billion bullet train. Mr. Kotkin calls the runaway-cost train “classic California.” “Where [Brown] with the state going bankrupt is even thinking about an expenditure like this is beyond comprehension. When the schools are falling apart, when the roads are falling apart, the bridges are unsafe, the state economy is in free fall. We’re still doing much worse than the rest of the country, we’ve got this growing permanent welfare class, and high-speed rail is going to solve this?”

For the full interview, see:
ALLYSIA FINLEY, interviewer. “THE WEEKEND INTERVIEW with Joel Kotkin: The Great California Exodus; A leading U.S. demographer and ‘Truman Democrat’ talks about what is driving the middle class out of the Golden State.” The Wall Street Journal (Sat., April 21, 2012): A13.
(Note: ellipses added; bracketed words in original.)
(Note: the online version of the interview is dated April 20, 2012.)

Capitalism More about Creating New Markets than about Competing to Dominate Old Ones

(p. A21) As a young man, Peter Thiel competed to get into Stanford. Then he competed to get into Stanford Law School. Then he competed to become a clerk for a federal judge. Thiel won all those competitions. But then he competed to get a Supreme Court clerkship.
Thiel lost that one. So instead of being a clerk, he went out and founded PayPal. Then he became an early investor in Facebook and many other celebrated technology firms. Somebody later asked him. “So, aren’t you glad you didn’t get that Supreme Court clerkship?”
The question got Thiel thinking. His thoughts are now incorporated into a course he is teaching in the Stanford Computer Science Department. (A student named Blake Masters posted outstanding notes online, and Thiel has confirmed their accuracy.)
One of his core points is that we tend to confuse capitalism with competition. We tend to think that whoever competes best comes out ahead. In the race to be more competitive, we sometimes confuse what is hard with what is valuable. The intensity of competition becomes a proxy for value.
In fact, Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too.
Now to be clear: When Thiel is talking about a “monopoly,” he isn’t talking about the illegal eliminate-your-rivals kind. He’s talking about doing something so creative that you establish a distinct market, niche and identity. You’ve established a creative monopoly and everybody has to come to you if they want that service, at least for a time.

For the full commentary, see:
DAVID BROOKS. “The Creative Monopoly.” The Wall Street Journal (Tues., April 24, 2012): A21.
(Note: the online version of the article is dated April 23, 2012.)

The online Peter Thiel notes are at:
http://blakemasters.tumblr.com/post/21169325300/peter-thiels-cs183-startup-class-4-notes-essay

Entrepreneur Sam Wyly Hard to Classify

Source of book image: http://www.charlesandsamwyly.com/images/1000-dollars-and-an-idea.jpg

I sometimes divide entrepreneurs into two broad types: free agent entrepreneurs and innovative entrepreneurs. Free agent entrepreneurs are the self-employed. Innovative entrepreneurs are the agents of Schumpeter’s process of creative destruction.
Then there are entrepreneurs like Sam Wyly who don’t fit very well in either category.
He built or improved businesses in ways that made the world better, but usually did not involve breakthrough innovations.
Like many of the entrepeneurs considered in Amar Bhidé’s main books, Wyly grew businesses that served consumers, enriched investors and created jobs. Some of his most important start-ups, especially early-on, involved computer services. And his efforts to compete with the government-backed AT&T monopoly, were heroic.
I read the 2008 version of his autobiography a few months ago, and found that it contained a few stories and observations that are worth pondering. In the next few weeks I will briefly quote a few of these.

The 2008 Wyly autobiography is:
Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.

I have not read the 2011 version of Wyly’s autobiography:
Wyly, Sam. Beyond Tallulah: How Sam Wyly Became America’s Boldest Big-Time Entrepreneur. New York: Melcher Media, 2011.

The dominant examples in Bhidé’s two main books are entrepreneurs like Wyly. The two main Bhidé books are:
Bhidé, Amar. The Origin and Evolution of New Businesses. Oxford, UK: Oxford University Press, 2000.
Bhidé, Amar. The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Princeton, NJ: Princeton University Press, 2008.

“Environmentalists” Yawn at Windmills Killing Thousands of Migratory Birds

(p. A15) Last June, the Los Angeles Times reported that about 70 golden eagles are being killed per year by the wind turbines at Altamont Pass, about 20 miles east of Oakland, Calif. A 2008 study funded by the Alameda County Community Development Agency estimated that about 2,400 raptors, including burrowing owls, American kestrels, and red-tailed hawks–as well as about 7,500 other birds, nearly all of which are protected under the Migratory Bird Treaty Act–are being killed every year by the turbines at Altamont.
A pernicious double standard is at work here. And it riles Eric Glitzenstein, a Washington, D.C.-based lawyer who wrote the petition to the U.S. Fish and Wildlife Service. He told me, “It’s absolutely clear that there’s been a mandate from the top” echelons of the federal government not to prosecute the wind industry for violating wildlife laws.
Mr. Glitzenstein comes to this issue from the left. Before forming his own law firm, he worked for Public Citizen, an organization created by Ralph Nader. When it comes to wind energy, he says, “Many environmental groups have been claiming that too few people are paying attention to the science of climate change, but some of those same groups are ignoring the science that shows wind energy’s negative impacts on bird and bat populations.”

For the full commentary, see:
ROBERT BRYCE. “Windmills vs. Birds; About 70 golden eagles are killed every year by turbines at California’s Altamont Pass, reports the LA Times..” The Wall Street Journal (Thurs., March 8, 2012): A15.
(Note: the online version of the article is dated March 7, 2012.)

Entrepreneurs Will Mine Asteroids to “Help Ensure Humanity’s Prosperity”

“Space mining has captivated Hollywood. Director James Cameron is a backer of the new venture.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B1) A new company backed by two Google Inc. billionaires, film director James Cameron and other space exploration proponents is aiming high in the hunt for natural resources–with mining asteroids the possible target.

The venture, called Planetary Resources Inc., revealed little in a press release this week except to say that it would “overlay two critical sectors–space exploration and natural resources–to add trillions of dollars to the global GDP” and “help ensure humanity’s prosperity.” The company is formally unveiling its plans at an event . . . in Seattle.
. . .
[The] . . . event is being hosted by Peter H. Diamandis and Eric Anderson, known for their efforts to develop commercial space exploration, and two former NASA officials.
Mr. Diamandis, a driving force behind the Ansari X-Prize competition to spur non-governmental space flight, has long discussed his goal to become an asteroid miner. He contends that such work by space pioneers would lead to a “land rush” by companies to develop lower-cost technology to travel to and extract resources from asteroids.

For the full story, see:
AMIR EFRATI. “A Quixotic Quest to Mine Asteroids.” The Wall Street Journal (Sat., April 21, 2012,): B1 & B4.
(Note: ellipses and bracketed word added.)
(Note: the online “updated” version of the article is dated April 23, 2012.)

The One Percent’s Quick History: “We Worked Hard, We Went to College, We Tried to Better Our Lives”

(p. F1) SOON after the Occupy Wall Street encampment was set up at Zuccotti Park in Manhattan last fall, 26-year-old Ryan Quick told his father, Leslie C. Quick III, a financier, that he might drop by the site.

“Don’t you even let me see you over there,” the father replied.
The senior Mr. Quick later said that he and his son were both “half-kidding” each other. But he need not have worried about any class rebellion. According to Mr. Quick, his son came back from his visit and said: “It just looks like a Phish concert. It’s difficult to get engaged by something that doesn’t really have a purpose.”
As scions of a family that co-founded Quick & Reilly, a pioneering discount brokerage firm acquired for $1.6 billion by another company in 1997, the Quicks are undoubtedly among the “1 percent” — the wealthiest 1 percent of Americans targeted by the Occupy Wall Street movement. Indeed, having made their fortune in finance, the Quicks might be particular targets.
. . .
(p. F5) “Almost all my clients are self-made,” said Christopher J. Cordaro, chief executive of RegentAtlantic Capital, a wealth management firm based in Morristown, N.J., whose clients have at least $2 million in investable assets. “They’re saying, ‘We worked hard, we went to college, we tried to better our lives. Isn’t that what I’m supposed to do?’ ”
That is also the Quick family’s history. When he joined the year-old family firm after graduating from college in 1975, Leslie Quick recalled, “we didn’t know if my father was going to declare bankruptcy or this discount brokerage thing was going to work.”

For the full story, see:
FRAN HAWTHORNE. “Color the 1 Percent 99 Percent Conflicted.” The New York Times (Thurs., February 9, 2012): F1 & F5.
(Note: ellipsis added.)
(Note: the online version of the article is dated February 8, 2012.)

Innovation Took “Three Years Working through the Bureaucratic Snags”

“FULL FLEDGED; The production prototype of the Terrafugia Transition, with its wings folded and road-ready.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 13) THE promise of an airplane parked in every driveway, for decades a fantasy of suburban commuters and a staple of men’s magazines, resurfaced this month in Manhattan. On display at the New York auto show was the Terrafugia Transition, an airplane with folding wings and a drive system that enabled it to be used on the road.
. . .
But there can be many delays along the road from concept to certification. For instance, government officials and the designers have had to determine which regulations — aircraft or automotive — take precedence when the vehicle in question is both.
. . .
In 2010, the $94,000 Maverick, a rudimentary buggy that takes to the air under a powered parachute, earned certification as a light-sport aircraft. Troy Townsend, design manager and chief test pilot for the company, based in Dunnellon, Fla., said he spent spent nearly all of his time over the course of three years working through the bureaucratic snags.
“There was a lot of red tape,” Mr. Townsend said. “The certification process went all the way to Oklahoma and Washington, D.C.”

For the full story, see:
CHRISTINE NEGRONI. “Before Flying Car Can Take Off, There’s a Checklist.” The New York Times, SportsSunday Section (Sun., April 29, 2012): 13.
(Note: ellipses added.)
(Note: the online version of the story is dated April 27, 2012.)

Source of table: online version of the NYT article quoted and cited above.

Steve Jobs Channels Ellis Wyatt

(p. 260) In 2007 Forbes magazine named Steve Jobs the highest-paid exec-(p. 261)utive of any of America’s five hundred largest companies, based on gains in the value of stock granted to him at Apple. He was on the board of directors of the Walt Disney Co. Yet his former residence in Woodside, where he had once met with Catmull and Smith and mused about buying Lucasfilm’s Computer Division, was now in a state of decay under his ownership.
He had wanted to demolish it; after a group of neighborhood residents opposed his plan to do so, he left the house open to the elements. The interior suffered damage from water and mold. Vines crept up the stucco walls and wandered inside.
The memories that haunted its hallways were those of Jobs’s darkest times. He had bought the house only months before the humiliation of his firing from Apple; he lived in it through that firing and through the hard, money-hemorrhaging years of Pixar and NeXT. He left it as his fortunes were about to change, as he was sending Microsoft away from Pixar, convinced that he had something he should hold on to.
When a judge ruled against his quest for a demolition permit, Jobs appealed in 2006 and 2007 all the way to the California Supreme Court, but he lost at every stage. He received proposals from property owners offering to cart the house away in sections and restore it elsewhere; he rejected them. One way or another, it seemed, he meant for the house to be destroyed.

Source:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.
(Note: italics in original.)
(Note: The passage above is from the Epilogue and the pages given above are from the hardback edition (pp. 260-261). The identical passage also appears in the 2009 paperback edition, but on p. 265.

“There Was Never a Plan . . . Just a Series of Mistakes”

“Robert Caro in his Manhattan office. The later volumes of his L.B.J. biography have taken more years to write than it took the former president to live them.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 37) “There was never a plan,” Caro said to me, explaining how he had become a historian and biographer. “There was just a series of mistakes.”
. . .
(p. 38) Caro had a[n] . . . epiphany about power in the early ’60s. He had moved on to Newsday by then, where he discovered that he had a knack for investigative reporting, and was assigned to look into a plan by Robert Moses to build a bridge from Rye, N.Y., across Long Island Sound to Oyster Bay. “This was the world’s worst idea,” he told me. “The piers would have had to be so big that they’d disrupt the tides.” Caro wrote a series exposing the folly of this scheme, and it seemed to have persuaded just about everyone, including the governor, Nelson Rockefeller. But then, he recalled, he got a call from a friend in Albany saying, “Bob, I think you need to come up here.” Caro said: “I got there in time for a vote in the Assembly authorizing some preliminary step toward the bridge, and it passed by something like 138-4. That was one of the transformational moments of my life. I got in the car and drove home to Long Island, and I kept thinking to myself: ‘Everything you’ve been doing is baloney. You’ve been writing under the belief that power in a democracy comes from the ballot box. But here’s a guy who has never been elected to anything, who has enough power to turn the entire state around, and you don’t have the slightest idea how he got it.’ ”
The lesson was repeated in 1965, when Caro had a Nieman fellowship at Harvard and took a class in land use and urban planning. “They were talking one day about highways and where they got built,” he recalled, “and here were these mathematical formulas about traffic density and population density and so on, and all of a sudden I said to myself: ‘This is completely wrong. This isn’t why highways get built. Highways get built because Robert Moses wants them built there. If you don’t find out and explain to people where Robert Moses gets his power, then everything else you do is going to be dishonest.’ “

For the full story, see:
CHARLES McGRATH. “Robert Caro’s Big Dig.” The New York Times Magazine (Sun., April 15, 2012): 34-39 & 52.
(Note: ellipses and bracketed letter added.)
(Note: the online version of the story is dated April 12, 2012.)

Caro’s book on Robert Moses is:
Caro, Robert A. The Power Broker: Robert Moses and the Fall of New York. New York: Alfred A. Knopf, Inc., 1974.