Category: Entrepreneurship

Censored and Walled-Off Internet Hurts Chinese Start-Ups

(p. B1) Two decades after Beijing began walling off its homegrown internet from the rest of the planet, the digital world has split between China and everybody else. That has prevented American technology companies like Facebook and Uber, which recently agreed to sell its China operations, from independently being able to tap the Chinese market.
For China’s web companies, the divide may have even more significant implications.
It has penned in the country’s biggest and most innovative internet companies. Alibaba, Baidu and Tencent have grown to be some of the world’s largest internet companies, but they rely almost entirely on domestic businesses. Their ventures abroad have been mostly desultory, and prognostications that they will challenge American giants internationally have (p. B2) not materialized.
. . .
In many ways, the split is like 19th century railroads in the United States, when rails of different sizes hindered a train’s ability to go from one place to another.
“The barrier to entering the U.S. or China market is becoming higher and higher,” said Kai-fu Lee, a venture investor from Taiwan and former head of Google China.
The difficulties that China’s internet companies face in expanding their success abroad are epitomized by WeChat, the messaging app owned by Tencent.
. . .
Critics pointed to Tencent’s lack of distinctive marketing, a record of censorship and surveillance in China and its late arrival to foreign markets. Yet the biggest problem was that outside of China, WeChat was just not the same. Within China, WeChat can be used to do almost everything, like pay bills, hail a taxi, book a doctor’s appointment, share photos and chat. Yet its ability to do that is dependent on other Chinese internet services that are limited outside the country.

For the full story, see:
PAUL MOZUR. “Internet’s Great Wall.” The New York Times (Weds., AUG. 10, 2016): B1-B2.
(Note: ellipses added.)
(Note: the online version of the story has the date AUG. 9, 2016, and has the title “Chinese Tech Firms Forced to Choose Market: Home or Everywhere Else.”)

Uber Drivers Learn to Work Optimal Hours

(p. B1) For nearly 20 years, economists have been debating how cabdrivers decide when to call it a day. This may seem like a trivial question, but it is one that cuts to the heart of whether humans are fundamentally rational — in this case, whether they earn their incomes efficiently — as the discipline has traditionally assumed.
In one camp is a group of so-called behavioral economists who have found evidence that many taxi drivers work longer hours on days when business is slow and shorter hours when business is brisk — the opposite of what economic rationality, to say nothing of common sense, would seem to dictate.
In another camp is a group of more orthodox economists who argue that this perverse habit is largely an illusion in the eyes of certain researchers. Once you consult more precise numbers, they argue, you find that drivers typically work longer hours when it is in their financial interest to do so.
. . .
So who is right? That’s where Uber comes in. When one of the company’s researchers, using its supremely detailed data on drivers’ work time and rides, waded into the debate with a paper this year, the results were intriguing.
Over all, there was little evidence that drivers were driving less when they could make more per hour than usual. But that was not true for a large portion of new drivers. Many of these drivers appeared to have an income goal in mind and stopped when they were near it, causing them to knock off sooner when their hourly wage was high and to work longer when their wage was low.
. . .
“A substantial, although not most, frac-(p. B5)tion of partners do in fact come into the market with income targeting behavior,” the paper’s author, Michael Sheldon, an Uber data scientist, wrote. The behavior is then “rather quickly learned away in favor of more optimal decision making.”
In effect, Mr. Sheldon was saying, the generally rational beings that most economists presume to exist are made, not born — at least as far as their Uber driving is concerned.
. . .
As for Mr. Sheldon, the Uber paper’s author, he attributed his finding to the adventurous nature of many Uber drivers, who were open to running headlong into unfamiliar territory. It’s the sheer unfamiliarity of the Uber driving experience, he speculated, that may explain the initial bout of economically irrational behavior.
Mr. Sheldon was less open to the idea that people who did not depend on Uber for their livelihood helped account for his finding. So far as Uber can tell from other research, he said, those who drive irregularly respond more to fare increases than more regular drivers, at any level of earnings.

For the full story, see:
NOAM SCHEIBER. “Are Uber Drivers Rational? Not Always, Economists Say.” The New York Times (Mon., SEPT. 5, 2016): B1 & B5.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date SEPT. 4, 2016, and has the title “How Uber Drivers Decide How Long to Work.”)

The working paper by Michael Sheldon mentioned above, is:
Sheldon, Michael. “Income Targeting and the Ridesharing Market.” Working Paper, Feb. 18, 2016.

Income Redistribution May Hurt Innovation

(p. A13) Edward Conard is on a dual crusade. First, he is out to prove that technological innovation is the major driver of the creation of wealth. Second, that government programs to redistribute income are at best futile and at worst the enemy of the middle class.
. . .
“The late Steve Jobs,” Mr. Conard writes, “may have made huge profits from his innovations, but his wealth was small in comparison with the value of the iPhone and its imitators to their users.”
. . .
“Redistribution–whether achieved through taxation, regulatory restrictions, or social norms–appears,” he asserts, “to have large detrimental effects on risk-taking, innovation, productivity, and growth over the long run, especially in an economy where innovation produced by the entrepreneurial risk-taking of properly trained talent increasingly drives growth.”

For the full review, see:
RICHARD EPSTEIN. “BOOKSHELF; The Necessity of the Rich; Steve Jobs may have earned huge profits from his innovations, but they pale in comparison with the value of the iPhone to its users.” The Wall Street Journal (Thurs., Sept. 15, 2016): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date Sept. 14, 2016, and has the title “BOOKSHELF; The Necessity of the Rich; Steve Jobs may have earned huge profits from his innovations, but they pale in comparison with the value of the iPhone to its users.”)

The book under review, is:
Conard, Edward. The Upside of Inequality: How Good Intentions Undermine the Middle Class. New York: Portfolio, 2016.

“I Could Lose My Ability to Control My Business”

(p. B4) Small-business owners say they are shouldering higher costs and scaling back expansion plans because of a revised federal rule that gives employees more leverage in settling workplace grievances.
The new policy, intended to hold businesses accountable for labor-law violations against people whose working conditions they control but don’t claim as employees, was put in place last year through a ruling by the National Labor Relations Board, . . .
. . .
Businesses say they are in a regulatory limbo because the new standard is vague about what constitutes control.
The previous test measured the direct control one business had over working conditions of people employed by another business. Now, even indirect control can count.
So far the impact seems to be largely on the franchisees. A home health-care business in Wisconsin is taking on $10,000 in annual recruiting costs because its franchiser stopped providing assistance to steer clear of regulators, and a small hotelier in Florida is abandoning expansion plans in small markets because one of its franchisers scaled back worker training it provides. A printing business owner in Washington state said he canceled plans to open an eighth store because he doesn’t want to risk the investment until it is clear his franchiser wouldn’t be considered a joint-employer.
“I could lose my ability to control my business,” said Chuck Stempler, an owner of the seven printing stores that operate under the AlphaGraphics brand in Washington and California.
. . .
Employers say the NLRB is confusing control with contractual relationships that help businesses and workers thrive.
“The NLRB is applying a new legal standard that would undermine a successful American business model that has enabled thousands of families to operate their own small businesses and help support millions of American jobs,” McDonald’s said in a statement, referring to the franchising business.

For the full story, see:
MELANIE TROTTMAN. “New Labor Law Curbs Small Firms’ Plans.” The Wall Street Journal (Sat., Aug. 6, 2016): B4.
(Note: ellipses added.)
(Note: the online version of the story has the date Aug. 5, 2016, and has the title “Some Small-Business Owners Trim Expansion Plans, Cite New Labor Law.”)

“Giving Peas a Chance”

(p. C1) Thank heavens Gregor Mendel was a lousy priest. Had he shown even the faintest aptitude for oratory or ministering to the poor, he might never have determined the basic laws of heredity. But bumbling he was, and he made a rotten university student to boot; his failures drove him straight to his room, where he bred mice in secret. The experiment scandalized his superiors.
“A monk coaxing mice to (p. C4) mate to understand heredity was a little too risqué, even for the Augustinians,” writes Siddhartha Mukherjee in “The Gene: An Intimate History.” So Mendel switched — auspiciously, historically — to pea plants. The abbot in charge, writes the author, acquiesced this time, “giving peas a chance.”
Love Dr. Mukherjee, love his puns. They’re everywhere. I warn you now.
. . .
Many of the same qualities that made “The Emperor of All Maladies” so pleasurable are in full bloom in “The Gene.” The book is compassionate, tautly synthesized, packed with unfamiliar details about familiar people.
. . .
But there are also crucial differences. Cancer is the troll that scratches and thumps beneath the floorboards of our consciousness, if it hasn’t already beaten its way into the room. The subject immediately commands our attention; it’s almost impossible to deny, and not to hear, the emotional clang of its appeal. In Dr. Mukherjee’s skilled hands, the story of this frightening disease became a page-turner. He explained its history, politics and cunning biological underpinnings; he traced the evolving and often gruesome logic underlying cancer treatment.
And in the middle of it all, agonizing over treatment protocols and watching his patients struggle with tremendous existential and physical pain, was the author himself.
There are far fewer psychological stakes in reading about the history of genetics. “The Gene” is more pedagogical than dramatic; as often as not, the stars of this story are molecules, not humans.
. . .
But any book about the history of something as elemental and miraculous as the gene is bound, at least indirectly, to tell the story of innovation itself. “The Gene” is filled with scientists who dreamed in breathtakingly lateral leaps.
Erwin Schrödinger in particular was one visionary cat: In 1944, he hazarded a guess about the molecular nature of the gene and decided it had to be a strand of code scribbled along the chromosome — which pretty much sums up the essence of DNA.

For the full review, see:
JENNIFER SENIOR. “Books of The Times; In Molecular Pursuit of the Genetic Code.” The New York Times (Mon., MAY 9, 2016): C1 & C4.
(Note: ellipses added.)
(Note: the online version of the review has the date MAY 8, 2016, and has the title “Books of The Times; Review: Siddhartha Mukherjee’s ‘The Gene,’ a Molecular Pursuit of the Self.”)

The book under review, is:
Mukherjee, Siddhartha. The Gene: An Intimate History. New York: Scribner, 2016.

Private Nav Canada More Innovative than Government FAA

(p. D1) Ottawa
Flying over the U.S.-Canadian border is like time travel for pilots. Going north to south, you leave a modern air-traffic control system run by a company and enter one run by the government struggling to catch up.
Airlines, the air-traffic controllers’ union and key congressional leaders all support turning over U.S. air-traffic control services to a newly created nonprofit company and leaving the Federal Aviation Administration as a safety regulator. It’s an idea that still faces strong opposition in Congress, but has gained traction this year.
The model is Nav Canada, the world’s second-largest air-traffic control agency, after the U.S.
. . .
The key, Nav Canada says, is its nongovernmental structure. Technology, critical to efficient airspace use these days, gets developed faster than if a government agency were trying to do it, officials say. Critics say slow technology development has been the FAA’s Achilles’ heel.
“We can fly optimal routes because of the technology they have. It makes a big difference,” American Airlines vice president Lorne Cass says. “These are things customers don’t see except they shave off minutes.”
Mr. Cass, who has worked for several airlines and the FAA, first visited Nav Canada in 2004 to see new technology. “They’ve always been pretty good at continuous modernization,” he says. “They just have more flexibility than the FAA has.”
. . .
(p. D2) In government, you often need giant programs with huge promises to get funding. But Nav Canada opted for small projects, often with no idea what the outcome should look like. The company hired a corps of techies that the federal agency had never had and involved controllers in development.
“We’re convinced you’re better off doing things incrementally than a big bang approach,” Mr. Koslow says.
Data linkage between cockpits and control centers is one example. Text messages with cockpits have been in use across oceans, in parts of Europe and across all of Canada for several years. Controllers in Montreal who handle planes to and from North America and both Europe and Asia say the texting system virtually eliminates problems of mishearing instructions and readbacks over the radio because of foreign accents.
Another innovation adopted around the world is electronic flight strips–critical information about each flight that gets changed on touch screens and passed from one controller to another electronically. Nav Canada has used them for more than 13 years. Many U.S. air controllers still use paper printouts placed in plastic carriers about the size of a 6-inch ruler that controllers scribble on.
. . .
Jerome Gagnon, a shift manager in Montreal’s control tower, says the electronic system has reduced workload, errors and noise. “We don’t want controllers to just be heads down. There’s a lot of stuff that happens out the window,” he says.
Rarely do controllers have to call each other to coordinate flights anymore, but making changes with the FAA on cross-border flights can’t be done electronically.
As he explains the process in the Montreal tower, other controllers start laughing. One blurts out incredulously: “You still have to call the FAA by phone!””

For the full story, see:
SCOTT MCCARTNEY. “THE MIDDLE SEAT; The Air-Traffic System U.S. Airlines Wish They Had.” The Wall Street Journal (Thurs., April 28, 2016): D1-D2.
(Note: ellipses added.)
(Note: the online version of the story has the date April 27, 2016. The online version has a couple of extra sentences that are included in the passages quoted above.)

The Internet Favors Creators in the Long Tail of Distribution

(p. A13) Does the internet pose a threat to established entertainment companies? Michael D. Smith and Rahul Telang lead a class at Carnegie Mellon University in which a student recently put that question to a visiting executive. He pooh-poohed the idea: “The original players in this industry have been around for the last 100 years, and there’s a reason for that.” As co-heads of CMU’s Initiative for Digital Entertainment Analytics, Messrs. Smith and Telang aim to counter this line of thought, and in “Streaming, Sharing, Stealing” they do just that, explaining gently yet firmly exactly how the internet threatens established ways and what can and cannot be done about it. Their book should be required for anyone who wishes to believe that nothing much has changed.
. . .
Then there’s the question of blockbusters vs. the long tail. In her book “Blockbusters” (2013), Anita Elberse, a Harvard Business School professor, contended that digital markets, far from favoring the “long tail” of products that were mostly unavailable in physical stores or theaters, actually concentrate sales at the top even further. Messrs. Smith and Telang quietly but effectively demolish this argument, noting numerous instances in which the opposite happened. In the case of one large chain, the top 100 titles accounted for 85% of the DVDs rented in-store–but when stores closed and customers were shifted to the Web, the most popular titles made up only 35% of the DVDs rented online.
The authors also note that, by making it easy for writers, musicians, and directors to work independently, digital technology has vastly increased the number of works available. Between 2000 and 2010, an explosion in self-publishing raised the number of new books issued per year to 3.1 million from 122,000.

For the full review, see:
FRANK ROSE. “BOOKSHELF; We’re All Cord Cutters Now; At one chain, the top 100 movie titles accounted for 85% of the DVDs rented in-store. But online, the top titles make up only 35% of rentals.” The Wall Street Journal (Weds., Sept. 7, 2016): A13.
(Note: ellipsis added.)
(Note: the online version of the review has the date Sept. 6, 2016.)

The book under review, is:
Smith, Michael D., and Rahul Telang. Streaming, Sharing, Stealing: Big Data and the Future of Entertainment. Cambridge, MA: The MIT Press, 2016.

Mobile Game Helps When Work Is Absurd Drudgery

(p. A1) SEOUL–When Lee Jin-po was laid off last year for the third time in as many years, the 29-year-old mobile-game programmer expressed his frustration in his own instinctive way: He made a mobile game about it.
In Mr. Lee’s “Don’t Get Fired!,” the object is to rise through the ranks at a nameless corporation by performing an endless string of mind-numbing tasks, while avoiding a long list of fireable offenses.
“It’s just like real life,” he says.
In South Korea, where youth unemployment has hit an all-time high amid sluggish economic growth, “Don’t Get Fired!” has become a certified hit–one in a small raft of mobile games that has found success by embracing the drudgery and absurdity of work.
. . .
(p. A10) Mr. Lee later found volunteers to translate it into 12 languages, helping the international version attract another million downloads. Griffin Crowley, a 20-year-old high-school graduate in a Cleveland suburb, couldn’t stop playing after stumbling on it while fiddling with his cellphone. “Sometimes, you just have to laugh at the futility of life,” says Mr. Crowley, who recently worked a stint at a telemarketing company.

For the full story, see:
Cheng, Jonathan. “Congratulations Player One, Your Zombie Boss Didn’t Fire You; South Korean unemployment inspires games about work; laugh at chief’s jokes.” The Wall Street Journal (Mon., August 6, 2016): A1 & A10.
(Note: ellipsis added.)
(Note: the online version of the story has the date August 8 [sic], 2016.)

Japan Counting on Innovative Entrepreneurs for Economic Growth

(p. B3) TOKYO–Stacks of cardboard boxes serve as makeshift partitions at Mistletoe Inc.’s new office in Tokyo’s posh Aoyama district, where startups gather to work on their latest projects.
The do-it-yourself vibe–a far cry from the stuffiness typical of Japanese corporate offices–is something founder Taizo Son, serial entrepreneur and youngest brother of SoftBank Group Corp. founder Masayoshi Son, wants to see more of.
“Japan has the talent and funds but lacks the necessary ecosystem to create its own Silicon Valley, so that’s what we’re trying to provide,” said Mr. Son, 43, who describes Mistletoe as a program to cofound new businesses.
The nation that created the Walkman and the bullet train before China even had a tech industry now lags behind as Chinese Internet startups like Alibaba Group Holding Ltd. become global powerhouses. With its once-dominant technology industry struggling, Japan is counting on entrepreneurs to rekindle its hobbling economy.
The government is pledging to fund startups, top universities have launched incubators and venture funds to transform their wealth of knowledge into innovation and even Japan’s oldest and largest conglomerates, such as the Mitsubishi and Mitsui groups, are looking to nurture entrepreneurs..

For the full story, see:
ALEXANDER MARTIN. “Japan Looks to Rekindle Its Technology Innovation.” The Wall Street Journal (Mon., April 11, 2016): B3.
(Note: the online version of the story has the date April 10, 2016, and has the title “Japan Tech Hunts for Restart Button.”)

Presence of Biomarkers Predicts Whether Checkpoint Inhibitor Works

(p. D1) A collaboration between an immunologist helping his stepmother fight cancer and the oncologist who treated her led to a discovery that could help many more patients benefit from a transformative new therapy.
A new class of drugs called checkpoint inhibitors works by releasing a molecular brake that stops the immune system from attacking tumors. So-called immunotherapy has been approved for several types of cancers and found to extend lives of patients with advanced disease for many years. The problem is that for most patients immunotherapy doesn’t work.
The researchers, from University of California, San Francisco, said they identified a unique type of immune-system cell that “robustly” predicts whether patients will respond to one of the medicines–an achievement has the potential to significantly expand the number of cancer patients who benefit from checkpoint inhibitors.
The new discovery is based on a high-tech analysis of melanoma tissue from 40 patients treated with a checkpoint inhibitor from Merck & Co. called Keytruda, which targets an immune-system brake called PD-1. Although researchers say it will take further research to determine its value in treating patients, the finding offers fresh insight into the complex relationship between the immune system and tumor cells.
. . .
(p. D3) The researchers analyzed results of a study involving Keytruda before it was approved. They looked at the CD8 cells that had infiltrated the melanoma tumors of 20 patients treated with the drug and found that if at least 30% of those cells were marked by PD-1 and CTLA-4, the patient responded to treatment. When fewer than 20% of the infiltrated cells had those markers, not one patient responded.

For the full story, see:
RON WINSLOW. “Road to a Cancer Advance.” The Wall Street Journal (Tues., Aug. 16, 2016): D1 & D3.
(Note: ellipsis added.)
(Note: the online version of the story has the date Aug. 15, 2016, and has the title “Chance Collaboration Yields an Advance in Cancer Treatment.”)