Entrepreneurship – Page 103 – artdiamondblog.com

Twitter CEO Returned to Nebraska to Found First Company

Evan Williams, Twitter CEO. Source of photo: online version of the NYT article quoted and cited below.

(p. 9) I GREW up on a farm in Nebraska, where we grew mostly corn and soybeans. During the summers I was responsible for making sure the crops were irrigated.

After high school, I enrolled at the University of Nebraska at Lincoln, but I stayed only a year and a half. I felt college was a waste of time; I wanted to start working. I moved to Florida, where I did some freelance copywriting. After that I moved to Texas and stayed with my older sister while I figured out what to do next. In 1994, I returned to Nebraska and started my first company with my dad.
We didn’t know anything about the Internet, but I thought it was going to be a big deal. We produced CD-ROMs and a video on how to use the Internet, and we did some Web hosting. I recruited some friends and we tossed around some ideas, but none of us knew how to write software and we didn’t have much money. We watched what entrepreneurs in California were doing and tried to play along.
. . .
My life has been a series of well-orchestrated accidents; I’ve always suffered from hallucinogenic optimism. I was broke for more than 10 years. I remember staying up all night one night at my first company and looking in couch cushions the next morning for some change to buy coffee. I’ve been able to pay my father back, which is nice, and my mother doesn’t worry about me as much since I got married a year and a half ago.

For the full story, see:
EVAN WILLIAMS. “The Boss; For Twitter C.E.O., Well-Orchestrated Accidents.” The New York Times, SundayBusiness Section (Sun., March 8, 2009): 9.
(Note: the online version of the story is dated March 7, 2009.)

Successful Entrepreneurs Do Not Need to Give Back to Society—They Already Gave at the Office

(p. A15) Successful entrepreneurs-turned-philanthropists typically say they feel a responsibility to “give back” to society. But “giving back” implies they have taken something. What, exactly, have they taken? Yes, they have amassed great sums of wealth. But that wealth is the reward they have earned for investing their time and talent in creating products and services that others value. They haven’t taken from society, but rather enriched us in ways that were previously unimaginable.
. . .
Let’s hope the philanthropy of those who . . . sign the Giving Pledge achieves great things. But let’s not fool ourselves into thinking that businessmen are likely to achieve more by giving their money away than they have by making it in the first place.

For the full commentary, see:
Kimberly O. Dennis. “Gates and Buffett Take the Pledge; Wealthy businessmen often feel obligated to ‘give back.’ Who says they’ve taken anything?” The Wall Street Journal (Fri., AUGUST 20, 2010): A15.
(Note: ellipses added.)

Tax Hike Would Hurt Entrepreneurs

(p. A17) When Congress returns from its summer recess, members will face a pivotal decision about the expiring Bush tax cuts. President Barack Obama has called for their permanent extension for singles with incomes below $200,000 and married couples with incomes below $250,000, but has proposed that most of the tax cuts for households with higher incomes be allowed to expire.
. . .
The fact that there are millions of people in the lower tax brackets with small amounts of business income may be interesting for some purposes, but it is irrelevant for the assessment of the economic impact of the tax hikes.
The numbers are clear. According to IRS data, fully 48% of the net income of sole proprietorships, partnerships, and S corporations reported on tax returns went to households with incomes above $200,000 in 2007.
. . .
Economic research supports a large impact. A pair of papers by economists Robert Carroll, Douglas Holtz-Eakin, Harvey Rosen and Mark Rider that were published in 1998 and 2000 by the National Bureau of Economic Research analyzed tax return data and uncovered high responsiveness of sole proprietors’ business activity to tax rates. Their estimates imply that increasing the top rate to 40.8% from 35% (an official rate of 39.6% plus another 1.2 percentage points from the restoration of a stealth provision that phases out deductions), as in Mr. Obama’s plan, would reduce gross receipts by more than 7% for sole proprietors subject to the higher rate.
These results imply a similar effect on proprietors’ investment expenditures. A paper published by R. Glenn Hubbard of Columbia University and William M. Gentry of Williams College in the American Economic Review in 2000 also found that increasing progressivity of the tax code discourages entrepreneurs from starting new businesses.

For the full commentary, see:
KEVIN A. HASSETT and ALAN D. VIARD. “The Small Business Tax Hike and the 97% Fallacy; The president’s plan to raise top marginal rates is holding back the very people who should be leading the economic recovery.” The Wall Street Journal (Fri., SEPTEMBER 3, 2010): A17.
(Note: ellipses added.)

One of the papers by Carroll et al, is:
Carroll, Robert, Douglas Holtz-Eakin, Mark Rider, and Harvey S. Rosen. “Income Taxes and Entrepreneurs’ Use of Labor.” Journal of Labor Economics 18, no. 2 (April 2000): 324-51.

The Hubbard paper is:
Gentry, William M., and R. Glenn Hubbard. “Tax Policy and Entrepreneurial Entry.” The American Economic Review 90, no. 2 (May 2000): 283-87.

Brit Papers Survived Due to “the Gratifying Defeat of the Luddite Unions by Rupert Murdoch”

“Evans says: “Ultimately, Mrs Thatcher was the reason I was fired, because I attacked her so much.” Source of caption and photo: online version of The Independent on Sunday article quoted and cited below.

(p. 12) As a condition of acquiring both The Times and The Sunday Times in early 1981, Murdoch promised that the independence of each would be protected by a board of directors, and made other solemn guarantees.

“On this basis,” Evans wrote in Good Times, Bad Times, “I accepted Rupert Murdoch’s invitation to edit The Times on February 17 1981. My ambition,” he admitted, “got the better of my judgement.” Every assurance regarding editorial independence, he added, was blithely disregarded.
On 9 March 1982, the day after he’d come back from burying his father at Bluebell Wood cemetery in Prestatyn, Harold Evans was sacked.
“Ultimately,” he says, “Mrs Thatcher was the reason I was fired. Because I was attacking her so much. When she started to dismantle the British economy, the most cogent critic of that policy which led, OK, to… a lot of things… was The Sunday Times. I wrote 70 per cent of that criticism myself. When I became editor of The Times, I continued to criticise monetarism. But I could still see some of the good things about her.”
“Just remind us?”
“I’m thinking – and you probably won’t agree with this because I sense that you’re a firm supporter of the NUJ [National Union of Journalists] – mainly of her dealings with the unions.”
“How do you feel about her now?”
“I think she is a very brave woman.”
“Hitler was brave.”
“Yes, but… she was right about terrorism. She was right about the IRA.”
“Do you think Britain would be a better place if she’d never existed?”
“No. I think Britain benefited from her having been there. Britain was becoming so arthritic with labour restrictions.”
“Good Times, Bad Times is an unforgiving portrait of Rupert Murdoch.”
. . .
(p. 13) [Evans] has called Rupert Murdoch elitist, anti-democratic, and asserted that the Australian cares nothing about the opinion of others, so long as his business expands. This is the same man who refers to “the gratifying defeat of the Luddite unions by Rupert Murdoch”.
. . .
“So how do you feel about the Murdoch empire now?”
Evans pauses. “I’m not that familiar with the British… OK. Let’s take an alternative scenario. Murdoch never arrives. I manage to take control of The Sunday Times with the management buyout. Then I get defeated by the unions. The Independent wouldn’t be here. Rival papers survived because they got the technology. Thanks to Murdoch.”

For the full interview, see:
Robert Chalmers, Interviewer. “Harold Evans: ‘All I tried to do was shed a little light’.” The Independent on Sunday (Sun., June 13, 2010): 8 & 10-13.
(Note: free-standing ellipsis, between paragraphs, added; internal ellipses in original; italics in original; bracketed name added in place of “he.”)

Jeff Bezos’ Goal: “Earth’s Biggest Selection”

Jeff Bezos. Source of photo: online version of the NYT article quoted and cited below.

(p. 18) You’re a longtime science buff who studied electrical engineering and computer science at Princeton. Why did you want to be a bookseller in the first place?
You have to go back in time to 1994, and there’s something very unusual about the book category. There are more items in the book category than there are items in any other product category. One of the things it was obvious you could do with an online store is have a much more complete selection.

Initially, Amazon sold books exclusively, but it has since expanded into a retail omnivore that sells basketballs and vacuum cleaners and hamster food and everything under the sun. What is your goal, exactly?
We want to have earth’s biggest selection. Earth’s biggest river, earth’s biggest selection.

For the full interview, see:
DEBORAH SOLOMON. “QUESTIONS FOR Jeffrey P. Bezos; Book Learning.” The New York Times, Magazine Section (Sun., December 6, 2009): 18.

(Note: bold in original, to indicate questions by Deborah Solomon.)
(Note: the online version of the interview is dated December 2, 2009.)

Both New York City and Cars Assert Individuality and Enterprise

(p. C5) If the culture and character of some cities are closely associated with modes of transportation (gondolas in Venice, bicycles in Amsterdam), the automobile may be the defining force in New York, not because it decreed the layout of streets or because it is essential (as in Los Angeles), but because its assertion of individuality and enterprise and its readiness to expand beyond assigned boundaries had so much to do with the city’s spirit.

For the full review, see:
EDWARD ROTHSTEIN. “Last Chance; Exhibition Review; The Anatomy of a Citywide Traffic Jam.” The New York Times (Tues., July 20, 2010): C1 & C5.
(Note: the online version of the article is dated July 19, 2010.)

Inventors Should Work Alone, Even If They Have to Moonlight

(p. 291) If you’re that rare engineer who’s an inventor and also an artist, I’m going to give you some advice that might be hard to take. That advice is: Work alone.

When you’re working for a large, structured company, there’s much less leeway to turn clever ideas into revolutionary new products or product features by yourself. Money is, unfortunately, a god in our society, and those who finance your efforts are businesspeople with lots of experience at organizing contracts that define who owns what and what you can do on your own.
But you probably have little business experience, know-how, or acumen, and it’ll be hard to protect your work or deal with all that corporate nonsense. I mean, those who provide the funding and tools and environment are often perceived as taking the credit for inventions. If you’re a young inventor who wants to change the world, a corporate environment is the wrong place for you.
(p. 292) You’re going to be best able to design revolutionary products and features if you’re working on your own. Not on a committee. Not on a team. That means you’re probably going to have to do what I did. Do your projects as moonlighting, with limited money and limited resources. But man, it’ll be worth it in the end. It’ll be worth it if this is really, truly what you want to do–invent things. If you want to invent things that can change the world, and not just work at a corporation working on other people’s inventions, you’re going to have to work on your own projects.
When you’re working as your own boss, making decisions about what you’re going to build and how you’re going to go about it, making trade-offs as to features and qualities, it becomes a part of you. Like a child you love and want to support. You have huge motivation to create the best possible inventions–and you care about them with a passion you could never feel about an invention someone else ordered you to come up with.
And if you don’t enjoy working on stuff for yourself–with your own money and your own resources, after work if you have to– then you definitely shouldn’t be doing it!

. . .

It’s so easy to doubt yourself, and it’s especially easy to doubt yourself when what you’re working on is at odds with everyone else in the world who thinks they know the right way to do things. Sometimes you can’t prove whether you’re right or wrong. Only time can tell that. But if you believe in your own power to objectively reason, that’s a key to happiness. And a key to confidence. Another key I found to happiness was to realize that I didn’t have to disagree with someone and let it get all intense. If you believe in your own power to reason, you can just relax. You don’t have to feel the pressure to set out and convince anyone. So don’t sweat it! You have to trust your own designs, your own intuition, and your own understanding of what your invention needs to be.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.
(Note: Italics and centered ellipsis in original.)

“Vast Majority of People” Will Reject a New Idea at the Start

(p. 288) . . . , my advice has to do with what you do when you find yours elf sitting there with ideas in your head and a desire to build them. But you’re young. You have no money. All you have is the stuff in your brain. And you think it’s good stuff, those ideas you have in your brain. Those ideas are what drive you, they’re all you think about.

(p. 289) But there’s a big difference between just thinking about inventing something and doing it. So how do you do it? How do you actually set about changing the world?

. . .

Well, first you need to believe in yourself. Don’t waver. There will be people–and I’m talking about the vast majority of people, practically everybody you’ll ever meet–who just think in black-and-white terms. Most people see things the way the media sees them or the way their friends see them, and they think if they’re right, everyone else is wrong. So a new idea–a revolutionary new product or product feature–won’t be understandable to most people because they see things so black and white. Maybe they don’t get it because they can’t imagine it, or maybe they don’t get it because someone else has already told them what’s useful or good, and what they heard doesn’t include your idea.
Don’t let these people bring you down. Remember that they’re just taking the point of view that matches whatever the popular cultural view of the moment is. They only know what they’re exposed to. It’s a type of prejudice, actually, a type of prejudice that is absolutely against the spirit of invention.

Inventor Wozniak Tries Entrepreneurship

(p. 247) In a way, that happened to me. The US Festival was exactly the opposite of the Apple experience for me. It didn’t come easily. It involved having plans to get certain groups, and having those groups cancel. It involved having plans for sites, and having those sites cancel. It involved having plans for equipment, and having the equipment not come through. It was a costly battle to do all the right things, but we did them anyway.

I’d written a check. I had confidence in my people. I’d already taken a stand, and when you take a stand, you don’t back away from it. Sometimes this has been a big problem in my life–especially marriage-wise–but if I’m in, I’m in. I don’t back out. And by the time I could see this was a disaster, I had this guy, Pete Ellis, and all the people he’d hired, counting on me. I couldn’t just (p. 248) all of a sudden pull the rug out. And we’d already planned the date: the first US Festival would be the Labor Day weekend of 1982, right after my first year back at school.
. . .
(p. 255) I loved that first US Festival concert, and I knew I’d made so many people happy doing it. We thought from press reports that enough people–nearly half a million–had shown up. So we thought that would make us money. But we lost money, nearly $12 million, because it turned out we didn’t sell as many tickets as there were people.

Source:
Wozniak, Steve, and Gina Smith. iWoz: Computer Geek to Cult Icon: How I Invented the Personal Computer, Co-Founded Apple, and Had Fun Doing It. New York: W. W. Norton & Co., 2006.

“A Rare Phenomenon in Europe — A Genuine Business Celebrity”

“Nicolas Hayek was asked to help shut the troubled Swiss watch industry, but instead he revived it by introducing the Swatch.” Source of caption and photo: online version of the NYT article quoted and cited below.

Richard Langlois has used the story of Nicolas Hayek to illustrate why Schumpeter was wrong when he worried that the entrepreneur might become obsolete.

(p. A23) Nicolas Hayek, a Lebanese-born business consultant who is widely credited with having saved the Swiss watch industry with the introduction of the Swatch, the inexpensive, plastic — and, as it transpired, highly collectible — wristwatch that made its debut in 1983, died Monday in Biel, Switzerland. He was 82.

Mr. Hayek, a founder and the chairman of the Swatch Group, died of heart failure while working at the company’s headquarters, according to an announcement on the company Web site.
The formation of the Swatch Group, which in addition to Swatch today comprises high-end watch brands like Breguet, Omega, Longines, Tissot, Calvin Klein and Mido, made Mr. Hayek one of Switzerland’s wealthiest men. The exquisite irony is that the company came about after Mr. Hayek was brought in to help shut the foundering Swiss watch industry altogether.
A flamboyant figure with a roguish sense of humor, Mr. Hayek was “a rare phenomenon in Europe — a genuine business celebrity,” as The Harvard Business Review described him in 1993.

For the full story, see:
MARGALIT FOX. “Nicolas Hayek Dies at 82; His Swatch Saved an Industry.” The New York Times (Tues., June 29, 2010): A23.
(Note: the online version of the article is dated June 28, 2010.)

Nicolas Hayek’s entrepreneurship is nicely summarized and analyzed on pp. 59-65 of:
Langlois, Richard N. The Dynamics of Industrial Capitalism: Schumpeter, Chandler and the New Economy. London: Routledge, 2006.