Category: Entrepreneurship

Silicon Valley Techies Make Pilgrimage to Hewlett-Packard Garage

(p. 6) The Birthplace of Silicon Valley
On a quiet Palo Alto street lined with multimillion-dollar Victorian and craftsman homes, Spanish villas, lemon trees and sidewalks perfect for jogging or strolling with babies in carriages, a National Register of Historic Places sign in one front yard recognizes the home’s famous roots. In the detached garage of the house, the Silicon Valley was seeded. The garage is where two Stanford students, William R. Hewlett and David Packard, began developing their first product, an audio oscillator, in 1938. Their partnership resulted in the establishment in 1939 of the Hewlett-Packard Company, a manufacturer of software and computer services.
What Berry Gordy Jr.’s restored upper flat in Detroit is for Motown music buffs, the Hewlett-Packard garage has become for techies, who make the pilgrimage to 367 Addison Ave. to snap photographs of the property.

For the full story, see:
KAREN CROUSE. “A Few Sights to Take in on a Drive to the Game.” The New York Times, SportsSunday Section (Sun., FEB. 6, 2016): 6.
(Note: bold subtitle in original.)
(Note: the online version of the story has the date FEB. 6, 2016, and has the title “On the Road to Super Bowl 50.”)

Regulatory “Pain in Spain”

(p. A1) Gerard Vidal formed a data-encryption firm, Enigmedia, when he couldn’t find an employer looking for a Ph.D. in physics. But even a physicist was perplexed by the paperwork involved in starting a company in Spain, and the launch was delayed months by a process he calls “illogical, inefficient and totally frustrating.”
For many in the eurozone, where government budget cuts and corporate layoffs have left more than 18 million people out of work, the only way to find work is to create their own jobs. But these inexperienced entrepreneurs are flying into harsh headwinds.
Scarce capital, dense bureaucracy, a culture deeply averse to risk and a cratered consumer market all suppress startups in Europe.
. . .
(p. A12) In 2013, the OECD ranked Spain second worst in a survey on barriers to entrepreneurship in 29 nations. Spanish entrepreneurs have found that one of their big business challenges is simply getting incorporated. In the six months that Diana and Arantxa Fernández needed to obtain the multitude of permits required to open up a nursery school last year, the sisters burned through most of the capital they had husbanded from taking lump-sum unemployment. Now they are on the financial ropes.
. . .
When David Fito tried to open a gluten-free bakery after getting laid off by a bank a few years ago, he said 30 banks refused to lend him the €100,000 he needed. He got the credit only after his parents pledged their apartment as collateral and seven other wage earners agreed to co-sign. He said his business is now growing.
. . .
In Spain, young people with an entrepreneurial DNA long felt like fish out of water. María Alegre started selling homemade jewelry in Barcelona at age 13 and still remembers her profit–13,000 pesetas, worth about $90 at the time. But she said she never heard the word “entrepreneurship” until her fifth year at a Spanish business school and didn’t get encouragement until she was studying at the University of Michigan. Today, the 29-year old Ms. Alegre is CEO and co-founder of Chartboost Inc., a 130-employee San Francisco company that helps mobile-game developers find new users and monetize games. Ms. Alegre bemoans what she calls a Spanish “culture of being against risk and not dreaming big enough.”

For the full story, see:

Matt Moffett. “New Entrepreneurs Find Pain in Spain.” The Wall Street Journal (Fri., Nov. 28, 2014): A1 & A12.
(Note: ellipses added.)
(Note: the online version of the story has the date Nov. 27, 2014.”)

Warren Buffett: High-Tech Especially Hard to Predict

(p. 1D) Turns out that Warren Buffett spoke out in IBM’s favor, sort of, 37 years ago when the government accused “Big Blue” of illegal
anti-competitive practices.
. . .
But Buffett was one of 87 witnesses who testified on behalf of the International Business Machines Corp. during the federal government’s antitrust trial.
. . .
In his testimony, Buffett said he asked the Price, Waterhouse accounting firm to calculate the debt levels of 104 other computer-oriented companies that, according to federal prosecutors, were harmed by IBM’s low prices and other alleged anti-competitive actions.
Buffett said his hypothesis was that the competing companies had trouble raising money to finance their growth because they had too much debt. The accounting analy-(p. 2D)sis, Buffett said in court, “bore that hypothesis out in a very conclusive manner.”
So why didn’t he buy IBM stock in 1980?
Because, he told the court, with high-tech companies it’s “particularly difficult to have a clear view of a long-term future. … High-technology companies are ones where both the product and the customer’s use of it are (areas in which) I don’t feel I have a full understanding.”

For the full commentary, see:
Steve Jordon. “WARREN WATCH; What Buffett said in court about IBM in 1980.” Omaha World-Herald (Sun., Jan 22, 2017): 1D-2D.
(Note: ellipses added.)
(Note: the online version of the commentary has the title “WARREN WATCH; What Warren Buffett said in court about IBM in 1980.”)

Venture Capital Stars Invested in Over-Hyped “Symbol of Silicon Valley’s Insular Excess”

(p. B2) MONTEREY, Calif. — From the moment it started, Juicero stood out as a symbol of Silicon Valley’s insular excess.
The company sold a $700 Wi-Fi-enabled juicer, trying to solve a problem that did not exist. It also raised some $120 million, and attracted a mountain of attention.
But on Friday, the company said it was shutting down operations — joining the hordes of other Silicon Valley start-ups that could not deliver business results to match the hype.
Started by a health fanatic with a checkered history as an entrepreneur, Juicero devised an elaborate scheme to deliver small glasses of expensive cold pressed juice to kitchens around the country. The machine scanned codes printed on pouches of chopped produce to help assess the freshness of the contents inside. Doug Evans, the founder, hired engineers, food scientists and fashionable industrial designers to work alongside him.
The company was a particularly bold bid to capitalize on the hype around the so-called internet of things and interest in the juice business. Mr. Evans believed there was a legion of customers who, once they tasted his juice, would find it superior to the many varieties that can be bought at convenience stores, juice bars or even Walmart.
Top venture capital firms including Google’s venture capital spinoff and Kleiner Perkins Caufield & Byers, as well as big companies like Campbell Soup, invested heavily in the company.

For the full story, see:

DAVID GELLES. “Start-Up That Sold $700 Juicer Shuts Down.” The New York Times (Sat., SEPT. 2, 2017): B2.
(Note: the online version of the story has the date SEPT. 1, 2017, and has the title “Juicero, Start-Up With a $700 Juicer and Top Investors, Shuts Down.” )

“Achievement Is a Magnet to Mentors and a Beacon to Backers”

(p. 7) It’s true that networking can help you accomplish great things. But this obscures the opposite truth: Accomplishing great things helps you develop a network.
Look at big breaks in entertainment. For George Lucas, a turning point was when Francis Ford Coppola hired him as a production assistant and went on to mentor him. Mr. Lucas didn’t schmooze his way into the relationship, though. As a film student he’d won first prize at a national festival and a scholarship to be an apprentice on a Warner Bros. film — he picked one of Mr. Coppola’s.
Or take Justin Bieber’s career: Although it took off after Usher signed him, he didn’t network his way into that meeting. Mr. Bieber taught himself to sing and play four instruments, put a handful of videos on YouTube, and a manager ended up clicking on one. Adele was discovered that way, too: She wrote and recorded a three-song demo, a friend posted it on Myspace, and a music exec heard it. Developing talent — and sharing it — catapulted them into those connections.
For entrepreneurs, too, achievement is a magnet to mentors and a beacon to backers. Spanx took off when Oprah Winfrey chose it as one of her favorite things of the year — but not because she was stalked by the company’s founder, Sara Blakely. For two and a half years, Ms. Blakely sold fax machines by day so that she could build her prototype of footless pantyhose by night. She sent one from the first batch to Ms. Winfrey.
Networks help, of course. In a study of internet security start-ups, having a previous connection to an investor increased the odds of getting funded by that investor in the first year. But it was pretty much irrelevant afterward. Accomplishments were the dominant driver of who invested over time.
Similarly, researchers found that in hospitals, the radiologists who ended up with the most desirable networks were the ones with the highest performance nine months earlier. And in banks, star performers attracted bigger networks and were more likely to maintain those ties. Achievements don’t just help us make connections; they also help sustain those connections.
. . .
So stop fretting about networking. Take a page out of the George Lucas and Sara Blakely playbooks: Make an intriguing film, build a useful product.
And don’t feel pressure to go to networking events. No one really mixes at mixers. Although we plan to meet new people, we usually end up hanging out with old friends. The best networking happens when people gather for a purpose other than networking, to learn from one another or help one another.

For the full commentary, see:
Grant, Adam. “Networking Is Overrated.” The New York Times, SundayReview Section (Sun., AUG. 27, 2017): 7.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date AUG. 24, 2017, and has the title “Good News for Young Strivers: Networking Is Overrated.”)

Inventor of Submarine “Was Shunted Aside”

(p. C6) There are very few wars in history that begin, dramatically, with a brand-new weapon displaying its transformative power, but one such case occurred in the southern North Sea in September 1914, when three large cruisers of the Royal Navy were torpedoed and swiftly sunk by a diminutive German U-boat, the U-9. At that moment, the age of the attack submarine was born, and the struggle for naval supremacy for a great part of both World War I and World War II was defined. The U-boat–shorthand for “Unterseeboot”–had come of age.
It is appropriate, then, that the historian Lawrence Goldstone begins “Going Deep” with a dramatic re-telling of the U-9’s exploit. It should be said immediately that his chronicle doesn’t present the whole history of submarine warfare but rather the story of the efforts of various American inventors and entrepreneurs–above all, an Irish-born engineer named John Philip Holland–to create a power-driven, human-directed and sub-marine vessel that could stalk and then, with its torpedoes, obliterate even the most powerful of surface warships.
. . .
“Going Deep” ends in 1914. By that time, the U.S. Navy was on its way to possessing some submarines–vessels equipped with torpedoes that were therefore capable, in theory, of sinking an enemy’s warships or his merchant marine, although in fact these boats were aimed at only coastal defense. And by 1914 American industry could boast of a nascent submarine-building capacity, especially in the form of the Electric Boat Co., which was to survive the capriciousness of the Navy Department’s “on-off” love affair with the submarine until World War II finally proved its undoubted power.
But these successes, limited though they were, were not John Philip Holland’s. He had played a major role–really, the greatest role–in developing the early submarine, grasping that it could transform naval warfare. He had grappled with and overcome most of the daunting technological obstacles in the way of making his vision a reality. Mr. Goldstone is surely right to give him such prominence. But eventually Holland was shunted aside by more ruthless entrepreneurs, diddled by business partners and denied Navy contracts. He passed away on Aug. 12, 1914, just as World War I was beginning. By then, feeling beaten and having retired, he was a quiet churchman and amateur historian. This part of Mr. Goldstone’s story is not a happy one.

For the full review, see:

Kennedy, Paul. “A Man Down Below; How an Irish-American engineer developed a Jules Verne-like wonder-weapon of the deep.” The Wall Street Journal (Sat., June 17, 2017): C6.
(Note: ellipsis added.)
(Note: the online version of the review has the date June 16, 2017.)

The book under review, is:
Goldstone, Lawrence. Going Deep: John Philip Holland and the Invention of the Attack Submarine. New York: Pegasus Books Ltd., 2017.

Pessimistic Are Best Prepared for Bad News

(p. A13) In a study published in the journal “Emotion” in February, 2016, Dr. Sweeny and colleagues at the University of California, Riverside, showed that people resort to a number of coping strategies to manage their discomfort while waiting for an outcome. Dr. Sweeny calls this “misery management.”
. . .
None of these coping mechanisms worked, according to the study. They failed to reduce the participants’ distress–and some even made it worse. . . .
A better way to wait, the researchers found, is when participants agonized through their waiting period, ruminating and feeling anxious and pessimistic rather than attempting to minimize their anxiety and worry. Those who did this responded more productively to bad news and more joyfully to good news than participants who suffered little during the wait. This is “waiting well.”

For the full commentary, see:
Elizabeth Bernstein. “When a Little Agonizing Helps.” The Wall Street Journal (Tues., May 23, 2017): A13.
(Note: ellipses added.)
(Note: the online version of the commentary has the date May 22, 2017, and has the title “How to Manage a Long Wait for News.”)

The paper co-authored by Sweeney, and mentioned above, is:
Sweeny, Kate, Chandra A. Reynolds, Angelica Falkenstein, Sara E. Andrews, and Michael D. Dooley. “Two Definitions of Waiting Well.” Emotion 16, no. 1 (Feb. 2016): 129-43.

Who Was the Breakfast Cereal Innovator?

(p. A15) . . . , it turns out that the turn-of-the-last-century origin and evolution of the cereal industry was a very nasty and unpleasant bit of business, as Howard Markel chronicles in “The Kelloggs: The Battling Brothers of Battle Creek.”
. . .
The Kelloggs (and others) thought that an easily digestible corn cereal might solve all the problems. The birth of breakfast cereal is a tortured tale. Both Kellogg brothers would insist on having made the crucial innovations, as would others, including the most successful copycat, C.W. Post, who moved to Battle Creek to make his new Shredded Wheat. Shredded Wheat became a top seller after John failed to conclude a deal to buy Post’s company and, worse, refused to aggressively sell the Kellogg cereal because he thought it unseemly for a medical doctor, and his increasingly famous sanitarium (“the San”), to sell a commercial product.
Through it all, John’s younger brother, Will–a plump, colorless, diligent numbers man–served as his long-suffering factotum. “The doctor was the San’s showman and carnival barker,” Mr. Markel writes, “while Will kept the place running smoothly and served as a brake to his brother’s tendency to make poor and costly business decisions.” Mr. Markel’s portrayal of the sibling dynamic edges a bit into a Scrooge-and-Cratchit stereotype, though it is amply backed up by anecdotes, such as the many times poor Will was obliged to take dictation while John sat on the toilet.
In 1905, after 25 years of this, Will said “enough.” He made a deal with John to leave the San and start a cereal company of his own, which in time became a global conglomerate.

For the full review, see:
Bryan Burrough. “BOOKSHELF; The Battle of Battle Creek.” The Wall Street Journal (Mon., Aug. 14, 2017): A15.
(Note: ellipses added.)
(Note: the online version of the review has the date Aug. 13, 2017, and has the title “BOOKSHELF; The Birth of a Cereal Empire.”)

The book under review, is:
Markel, Howard. The Kelloggs: The Battling Brothers of Battle Creek. New York: Pantheon, 2017.

Inventor Haber and Entrepreneur Bosch Created “an Inflection Point in History”

(p. C7) . . . , Mr. Kean’s narrative of scientific discovery jumps back and forth. The first episode narrated in detail is Fritz Haber and Carl Bosch’s conversion of nitrogen into ammonia, the crucial step in producing artificial fertilizer, which Mr. Kean characterizes as “an inflection point in history” that in the 20th century “transformed the very air into bread.” The process consumes 1% of the global energy supply, producing 175 million tons of ammonia fertilizer a year and generating half the world’s food. Haber and Bosch both won Nobel Prizes but were subsequently tainted by their involvement in developing chlorine gas for the German military.
The book’s middle section turns back the clock to steam power, the technology that launched the Industrial Revolution. James Watt was its master craftsman, though Mr. Kean confesses that, as “a sucker for mechanical simplicity,” he regards Watt’s pioneering engine, with its separate condenser, as “a bunch of crap cobbled together.” A more elegant application of gases was Henry Bessemer’s process for making steel, which used blasts of compressed air to make obsolete the laborious and energy-hungry mixing of liquid cast iron and carbon.

For the full review, see:
Mike Jay. “Adventures in the Atmosphere.” The Wall Street Journal (Sat., July 22, 2017): C7.
(Note: ellipsis added.)
(Note: the online version of the review has the date July 21, 2017.)

The book under review, is:
Kean, Sam. Caesar’s Last Breath: Decoding the Secrets of the Air Around Us. New York: Little, Brown and Company, 2017.

Russian Regulators Jail Entrepreneur for Innovating “Too Fast and Too Freely”

(p. A1) AKADEMGORODOK, Russia — Dmitri Trubitsyn is a young physicist-entrepreneur with a patriotic reputation, seen in this part of Siberia as an exemplar of the talents, dedication and enterprise that President Vladimir V. Putin has hailed as vital for Russia’s future economic health.
Yet Mr. Trubitsyn faces up to eight years in jail after a recent raid on his home and office here in Akademgorodok, a Soviet-era sanctuary of scientific research that was supposed to showcase how Mr. Putin’s Russia can harness its abundance of talent to create a modern economy.
A court last Thursday [August 3, 2017] extended Mr. Trubitsyn’s house arrest until at least October, which bars him from leaving his apartment or communicating with anyone other than his immediate family. Mr. Trubitsyn, 36, whose company, Tion, manufactures high-tech air-purification systems for homes and hospitals, is accused of risking the lives of hospital patients, and trying to lift profits, by upgrading the purifiers so they would consume less electricity.
Most important, he is accused of doing this without state regulators certifying the changes.
It is a case that highlights the tensions between Mr. Putin’s aspirations for a dynamic private sector and his determination to enhance the powers of Russia’s security apparatus. Using a 2014 law meant to protect Russians from counterfeit medicine, investigators from the Federal Security Service, the post-Soviet KGB, and other agencies have accused Mr. Trubitsyn of leading a criminal conspiracy to, essentially, innovate too fast and too freely.
. . .
(p. A9) Irina Travina, the founder of a software start-up and head of the local technology-business association, said Akademgorodok was “the best place in Russia,” with “outstanding schools, low crime and a high concentration of very smart people.”
But she said Mr. Trubitsyn’s arrest had delivered a grave blow to the community’s sense of security.
“In principle, anyone can fall into this situation,” Ms. Travina said, praising Mr. Trubitsyn as a patriot because he had not moved abroad and had invested time and money in science education for local children. “It can happen to anybody,” she added. “Everyone has some sort of skeleton in their closet. Maybe nothing big, but they can always find something to throw you in jail for.”

For the full story, see:
ANDREW HIGGINS. “Russia Wants Innovation, but Jails Innovators.” The New York Times (Thurs., AUG. 10, 2017): A1 & A9.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date AUG. 9, 2017, and has the title “Russia Wants Innovation, but It’s Arresting Its Innovators.”)