Category: Entrepreneurship

Tech Firms Rally Their Customers to Fight Restrictive Regulations

(p. A23) The nasty battle between Uber and the administration of Mayor Bill de Blasio over New York City’s proposed cap on livery vehicles has ended, at least for now, with the city and the ride-hailing giant agreeing to postpone a decision pending a “traffic study.” There’s no doubt who won, though. The mayor underestimated his opponent and was forced to retreat.
It wasn’t just conventional pressure — ads, money, lobbying — that caught the mayor off guard. Uber mobilized its customers, leveraging the power of its app to prompt a populist social-media assault, all in support of a $50 billion corporation. The company added a “de Blasio’s Uber” feature so that every time New Yorkers logged on to order a car, they were reminded of the mayor’s threat (“NO CARS — SEE WHY”) and were sent directly to a petition opposing the new rules. Users were also offered free Uber rides to a June 30 rally at City Hall. Eventually, the mayor and the City Council received 17,000 emails in opposition. Just as Uber has offloaded most costs of operating a taxi onto its drivers, the company uses its customers to do much of its political heavy lifting.
Uber’s earlier strategy to win entry into the Portland, Ore., market followed a similar pattern. When the city wasn’t allowing the company to operate taxis, Uber exploited rules that allowed it to act as a delivery company, and distributed free ice cream around town. Using data on these deliveries, the firm shrewdly recruited recipients as pro-Uber citizen lobbyists, pressuring local officials to allow their cars to pick up passengers. It worked.
Many tech firms now recognize the organizing power of their user networks, and are weaponizing their apps to achieve political ends. Lyft embedded tools on its site to mobilize users in support of less restrictive regulations. Airbnb provided funding for the “Fair to Share” campaign in the Bay Area, which lobbies to allow short-term housing rentals, and is currently hiring “community organizers” to amplify the voices of home-sharing supporters. Amazon’s “Readers United” was an effort to gain customer backing during its acrimonious dispute with the publisher Hachette. Emails from eBay prodded users to fight online sales-tax legislation.

For the full commentary, see:
EDWARD T. WALKER. “The Uber-ization of Activism.” The New York Times (Fri., AUG. 7, 2015): A23.
(Note: the online version of the commentary has the date AUG. 6, 2015.)

Where Fidelistas Miss Mr. Hershey’s Company Town

(p. A9) This small town on Cuba’s northern coast is steeped in memory and wistfulness, a kind of living monument to the intertwined histories of the United States and Cuba and to the successes and failures of Fidel Castro’s social revolution.
The town dates to 1916, when Milton S. Hershey, the American chocolate baron, visited Cuba for the first time and decided to buy sugar plantations and mills on the island to supply his growing chocolate empire in Pennsylvania. On land east of Havana, he built a large sugar refinery and an adjoining village — a model town like his creation in Hershey, Pa. — to house his workers and their families.
He named the place Hershey.
The village would come to include about 160 homes — the most elegant made of stone, the more modest of wooden planks — built along a grid of streets and each with tidy yards and front porches in the style common in the growing suburbs of the United States. It also had a public school, a medical clinic, shops, a movie theater, a golf course, social clubs and a baseball stadium where a Hershey-sponsored team played its home games, residents said.
The factory became one of the most productive sugar refineries in the country, if not in all of Latin America, and the village was the envy of surrounding towns, which lacked the standard of living that Mr. Hershey bestowed on his namesake settlement.
. . .
“I’m a Fidelista, entirely in favor of the revolution,” declared Meraldo Nojas Sutil, 78, who moved to Hershey when he was 11 and worked in the plant during the 1960s and ’70s. “But slowly the town is deteriorating.”
Many residents do not hesitate to draw a contrast between the current state of the town and the way that it looked when “Mr. Hershey,” as he is invariably called here, was the boss.
Residents seem amused by, if not proud of, the ties to the United States.
Most still use the village’s original name, pronounced locally as “AIR-see.” And Hershey signs still hang at the town’s train station, a romantic nod to a bygone era, though perhaps also a symbol of hope that the past — at least, certain aspects of it — will again become the present.

For the full story, see:
KIRK SEMPLE. “CAMILO CIENFUEGOS JOURNAL; Past Is Bittersweet in Cuban Town That Hershey Built.” The New York Times (Thurs., DEC. 7, 2016): A9.
(Note: ellipsis added.)
(Note: the online version of the article has the date DEC. 7, 2016, and has the title “CAMILO CIENFUEGOS JOURNAL; In Cuban Town That Hershey Built, Memories Both Bitter and Sweet.”)

Science Can Learn Much from Outliers “Who Are Naturally Different”

(p. 1) Abby Solomon suffers from a one-in-a-billion genetic syndrome: After just about an hour without food, she begins to starve. She sleeps in snatches. In her dreams she gorges on French fries. But as soon as she wakes up and nibbles a few bites, she feels full, so she ends up consuming very few calories. At 5 feet 10 inches tall, she weighs 99 pounds.
Now 21 years old, she is one of the few people in the world to survive into adulthood with neonatal progeroid syndrome, a condition that results from damage to the FBN1 gene.
. . .
(p. 6) Dr. Chopra told me that, as far as medical science is concerned, Abby Solomon is worth thousands of the rest of us.
. . .
“Nothing comes close to starting with people who are naturally different,” he said. This is why he searches out patients at the extreme ends of the spectrum — those who are wired to weigh 80 pounds or 380 pounds. He said, “We have the opportunity to help a bigger swath of humanity when we learn from these outliers.”
In 2013, after hearing about Ms. Solomon’s unusual condition from another patient, he asked her to visit his clinic. Ms. Solomon warned him that she would be able to carry on a conversation for only 15 minutes before she needed to snack on chips or a cookie. That remark inspired a revelation. Dr. Chopra realized that “she had to eat small, sugary meals all day to stay alive, because her body was constantly running out of glucose,” he said.
The clue led Dr. Chopra and his colleagues to their discovery of the blood-sugar-regulating hormone, which they named asprosin. Ms. Solomon’s natural asprosin deficiency keeps her on the brink of starvation, but Dr. Chopra’s hope is that an artificial compound that blocks asprosin could be used as a treatment for obesity. He and his team have already tested such a compound on mice, and found that it can reverse insulin resistance and weight gain.

For the full commentary, see:
PAGAN KENNEDY. “The Thin Gene.” The New York Times, SundayReview Section (Sun., NOV. 27, 2016): 1 & 6.
(Note: ellipses added.)
(Note: the online version of the commentary has the date NOV. 25, 2016.)

Not All Old Ideas Should Be Recycled

(p. C16) “What is true in the consumer tech industry is true in science and other fields of thinking,” Mr. Poole elaborates. “The story of human understanding is not a gradual, stately accumulation of facts” but rather “a wild roller-coaster ride full of loops and switchbacks.”
Horses, for example, are once again being used in warfare in the Middle East. Vinyl records are back after losing out to digital CDs and internet streaming. Leeches, whose use was once considered a barbaric medieval practice, are now an FDA-approved “medical device” for cleaning wounds. Bicycles are making a comeback as a popular and efficient means of moving about in large, crowded cities. Blimps are starting to compete with helicopters for moving heavy cargo.
. . .
To understand this process of rediscovery–“old is the new new”–we need to abandon the myth of progress as something that results from a rejection of all that is old.
Still, not all old ideas will return reconfigured into new and useful ones, and it is here where readers may find room for disagreement, despite Mr. Poole’s many caveats.
. . .
That there are many unsolved mysteries in science does not always mean that we should turn to the past for insight. Sometimes–usually, in fact–the bad ideas rejected by science belong in the graveyard. Phlogiston, miasma, spontaneous generation, the luminiferous aether–wrong, wrong, wrong and wrong.
Nevertheless, those notions–and many others that Mr. Poole surveys in this thought-provoking book–were wrong in ways that led scientists toward a better understanding, and the middle chapters of “Rethink” elegantly recount these stories. Going forward, Mr. Poole ends by suggesting that we adopt a “view from tomorrow” in which we “try to consider an idea free of the moral weight that attaches to it in particular historical circumstances” and that “we could try to get into the habit of deferring judgments about ideas more generally” in order to keep an open mind. On the flip side, skeptics should not rush to dismiss a consensus idea as wrong just because consensus science is not always right. Most of today’s ideas gained consensus in the first place for a very good reason: evidence. Do you know what we call alternative science with evidence? Science.

For the full review, see:

MICHAEL SHERMER. “Everything Old Is New Again.” The Wall Street Journal (Sat., December 10, 2016): C16.
(Note: ellipses added.)
(Note: the online version of the review has the date Dec. 9, 2016, and has the title “Electric Cars Are Old News.”)

The book under review, is:
Poole, Steven. Rethink: The Surprising History of New Ideas. New York: Scribner, 2016.

Entrepreneur Hires for Perseverance

Max Levchin, who is quoted below, is an entrepreneur who played an important role in the early days of PayPal.

(p. 2) How do you think your parents and grandparents influenced your leadership style today?

My grandmother was exceptionally formative. She basically was willpower personified. If she wanted something to happen, it would happen. She had this walk-through-walls style where you did not ask for permission or forgiveness; you just did what you needed to get it done. I still judge some of my decisions based on: What would Grandma decide? Was I sufficiently tenacious or not enough?
And one thing I have found over the years is that in hiring, the dominant characteristic I select for is this sense of perseverance in really tough situations. It’s like the difference between endurance athletes and sprinters. I think it is a really good predictor for how people behave under severe stress.
Working in a start-up means there is a baseline of stress with occasional spikes. There are people who are really good at handling spikes. In fact, most people are really good at handling spikes. But normal isn’t normal. There is constant stress. And so I look for endurance athletes, in the business sense.

For the full interview, see:
ADAM BRYANT. “Corner Office; Looking for Signs of Endurance.” The New York Times, SundayBusiness Section (Sun., December 11, 2016): 2.
(Note: bold in original.)
(Note: the online version of the interview has the date DEC. 9, 2016, and has the title “Corner Office; Max Levchin of Affirm: Seeking the Endurance Athletes of Business.” The bold words are Adam Bryant’s question; the non-bold words are Max Levchin’s answer.)

Uber Fights Regulations by Asking Forgiveness, Not Permission

(p. B3) For seven years, Uber’s stance on complying with regulations has been consistent: Ask forgiveness, not permission.
On Friday [December 16, 2016], the ride-hailing company stuck to that position. It said it had no intention of ending a new test of its self-driving vehicles in San Francisco, even though California regulators had said the service was illegal because Uber had not obtained the necessary permits. Uber said its self-driving cars were still on the road and picking up passengers.
The dispute is rooted in Uber’s refusal to seek a permit from the California Department of Motor Vehicles, which would allow it to test autonomous vehicles under certain conditions. Companies like Google, Tesla Motors and Mercedes-Benz have all gotten such permits.
Uber officials contend that under the letter of California law, the company does not need a permit because the motor vehicles department defines autonomous vehicles as those that drive “without the active physical control or monitoring of a natural person.” Uber said its modified, self-driving Volvo XC90s require human oversight, and therefore do not fit California’s definition of an autonomous vehicle.
. . .
The episode serves the latest volley in Uber’s war with local and state regulators — not only in the United States, but in many of the more than 70 countries in which the company operates. Uber has previously grappled with the authorities in California over safety concerns. And Otto, the self-driving trucking start-up founded by Mr. Levandowski and acquired by Uber in August, has flouted state laws in Nevada in the past.

For the full story, see:
MIKE ISAAC. “Uber Defies California Officials Over Self-Driving Cars.” The New York Times (Sat., December 17, 2016): B3.
(Note: ellipsis, and bracketed date, added.)
(Note: the online version of the story has the date DEC. 16, 2016, and has the title “Uber Defies California Regulators With Self-Driving Car Service.”)

Reticent George Lucas Has Single-Minded Work Ethic

(p. C12) Although sometimes mocked by his contemporaries for his laborious approach to screenwriting (the script for “Star Wars” would evolve painfully over two years, as Mr. Jones describes in detail), Mr. Lucas developed for “Star Wars” a prodigious range of characters and settings. He had always loved make-believe, he recalled, “but it was the kind of make-believe that used all the technological toys I could come by, like model airplanes and cars.” Mr. Lucas earned respect as a shrewd and unsentimental negotiator. “I don’t borrow money,” he would say flatly, and his work ethic was second to none. From the outset, he foresaw the potential of merchandising, and by the late 1970s virtually every child in America and around the world would cherish his or her “Star Wars” figurines. In 1975, he established Industrial Light & Magic, a company that has produced the special effects not just for Mr. Lucas’s films but also for many Oscar-winning titles of the next 20 years, including “Jurassic Park.” He believed in the potential of computer games and perhaps regretted having sold his brainchild Pixar to Steve Jobs in 1986, far too early. He embraced the digital era, even predicting the advent of pay-per-view and online streaming.
Mr. Jones returns time and again to Mr. Lucas’s single-minded personality, in which work almost always took precedence. Fiercely independent, he was quite simply “the boss,” refusing to compromise with studio demands. Mr. Jones notes that Mr. Lucas has had “an inherent ability to hire the right people, and a preternatural knack for asking the right questions.” Diagnosed early on as a diabetic, Mr. Lucas has eschewed drugs and liquor. Reticent but not quite a recluse, devoted to his children, he hovers tantalizingly beyond the reach of the gossip columnists.

For the full review, see:
PETER COWIE. “A Death Star Is Born.” The Wall Street Journal (Sat., December 10, 2016): C12.
(Note: the online version of the review has the date Dec. 9, 2016, and has the title “George Lucas: The Edison of the Movie Industry.”)

The book under review, is:
Jones, Brian Jay. George Lucas: A Life. New York: Little, Brown and Company, 2016.

Cloud-Computing Firms Run Key Services on Private Servers

(p. B8) For nearly a decade, Amazon Web Services, the giant retailer’s cloud computing division, has told prospective customers: Ditch your data center and trust us to run your applications, store your data and host your internal software development.
Yet Amazon.com Inc. itself doesn’t fully run in the cloud.
Amazon isn’t alone. The other top cloud providers– Google Inc., Microsoft Corp. and International Business Machines Corp.–use their own cloud services for some purposes, but they continue to keep certain functions on private servers. Their struggles are a microcosm of the issues that dog their customers: Worries about reliability, security and risks inherent with change that have made it hard to move critical computing tasks to the public cloud.
“The vast majority of Amazon.com runs on AWS,” a company spokesperson said, and it intends to run everything there eventually.
The fact that Amazon still uses private servers is “ironic,” said Ed Anderson, an analyst with Gartner, which advises customers on both cloud services and data center servers. “That’s exactly why we tell people evaluating cloud services, ‘Do not buy into the hype. Do not buy into the myths. You have to be pragmatic, just like these vendors are,'” he said.

For the full story, see:
ROBERT MCMILLAN. “Companies Touting Cloud-Computing Don’t Always Use It.” The Wall Street Journal (Weds., Aug. 5, 2015): B8.
(Note: the online version of the story has the date Aug. 4, 2015, and has the title “Cloud-Computing Kingpins Slow to Adapt to Own Movement.”)

Unbinding Entrepreneurs Can Create Jobs and Speed Growth

(p. A21) This week more than 160 countries are celebrating Global Entrepreneurship Week. The Kauffman Foundation, which I once led, created this event eight years ago to encourage other nations to follow the American tradition of bottom-up economic success. Yet this example has been less powerful in recent years, as American entrepreneurship has waned. Fortunately, President-elect Donald Trump has plenty of options if he wants to resurrect America’s startup economy.
Consider the economic situation that the president-elect is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.
Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they’re located. At the same time, fewer U.S. businesses are being started. New firms are the country’s principal generator of new jobs. Data from the Kauffman Foundation suggest companies less than five years old create more than 80% of new jobs every year. While the nation seems more enthusiastic than ever about the promise of entrepreneurship, fewer than 500,000 new businesses were started in 2015. That is a disastrous 30% decline from 2008.
. . .
What can President Trump do to encourage more entrepreneurship?
. . .
Government must . . . widen the scope of innovation by stepping back and letting the market find the future. By promoting trendy ideas and subsidizing politically favored companies, government dampens diversity in creative business ideas.
. . .
Mr. Trump can also reverse regulatory sprawl and cut government-imposed requirements that add to every entrepreneurs’ costs and risks. Anti-growth policies like ObamaCare and minimum-wage increases make hiring workers prohibitively expensive.
. . .
With these policies in mind, President Trump should set another goal: that his administration will create an environment that enables one million Americans to start companies every year. Such an outcome would assure his target of 4% GDP growth, as well as full employment.

For the full commentary, see:
CARL J. SCHRAMM. “The Entrepreneurial Way to 4% Growth; Trump should set a goal: fix the business climate so a million Americans a year can start companies.” The Wall Street Journal (Weds., Nov. 16, 2016): A21.

Not All Secure Jobs Are Good Jobs

(p. C8) The village idiot of the shtetl of Frampol was given the job of waiting at the village gates for the arrival of the Messiah. The pay wasn’t great, he was told, but the work was steady.

For Epstein’s book recommendations, see:
Joseph Epstein. “12 Months of Reading.” The Wall Street Journal (Sat., December 10, 2016): C8.
(Note: the online version of the review has the date Dec. 7, 2016, and has the title “Books of The Times; Review: ‘A Truck Full of Money’ and a Thirst to Put It to Good Use.”)