Entrepreneurship – Page 67 – artdiamondblog.com

Small Business Will Fire Workers When Minimum Wage Is Raised

(p. B4) . . . , Charlene Conway is watching her numbers. For 22 years, Ms. Conway and her husband have run Carousel Family Fun Centers in Fairhaven and Whitman, Mass. The business has annual revenue of less than $500,000 and depends exclusively on part-time minimum-wage earners, mostly teenagers, to handle tasks like running the snack bar and maintaining the games.
This year, Massachusetts is considering raising its minimum to $9 an hour, from $8. Should that happen, Ms. Conway said, she will probably need to reduce her staff of 20. Her employees currently make an average of $9 an hour, with managers earning from $10 to $15. Like Ms. Riley, Ms. Conway said that an increase in the minimum would force her to raise pay across the board.
And she, too, is reluctant to raise prices again. In 2011 and 2012, she increased her admission fees by a dollar — they generally run from $5 to $10 now, based on age and time of day. Another increase, she said, would just make things worse: “We will price ourselves out of business.”
In the past, when Massachusetts increased the state’s minimum, Ms. Conway responded by increasing the minimum age of her workers to 16 from 14. “I’m not going to pay a 14-year-old $9 an hour with no experience, maturity or work ethic,” she said. More recently, she has been hiring 18-year-olds with college experience. “What this does,” she said, “is eliminate the opportunity for young people to get started in the work force.”
Should minimum wage reach $10 an hour, Ms. Conway said she would reduce her staff to 10 employees and double up on work tasks. “This is a slippery slope that could absolutely cause me to shut down and force me into bankruptcy,” she said.

For the full commentary, see:
STACY PERMAN. “SMALL BUSINESS; As Minimum Wages Rise, Businesses Grapple With Consequences.” The New York Times (Thurs., Feb. 6, 2014): B4.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date FEB. 5, 2014.)

Khan’s Cousins Liked Him Better on YouTube than in Person

“Salman Khan at the offices of Khan Academy, which reaches more than 10 million users. Bill Gates invested in the school.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D5) In 2008, Salman Khan, then a young hedge-fund analyst with a master’s in computer science from M.I.T., started the Khan Academy, offering free online courses mainly in the STEM subjects — science, technology, engineering and mathematics.

Today the free electronic schoolhouse reaches more than 10 million users around the world, with more than 5,000 courses, and the approach has been widely admired and copied. I spoke with Mr. Khan, 37, for more than two hours, in person and by telephone. What follows is a condensed and edited version of our conversations.
. . .
Did you have background as a math educator?
No, though I’ve had a passion for math my whole life. It got me to M.I.T. and enabled me to get multiple degrees in math and engineering. Long story shortened: Nadia got through what she thought she couldn’t. Soon word got around the family that “free tutoring” was going on, and I found myself working on the phone with about 15 cousins.
To make it manageable, I hacked together a website where my cousins could go to practice problems and I could suggest things for them to work on. When I’d tutor them over the telephone, I’d use Yahoo Doodle, a program that was part of Yahoo Messenger, so they could visualize the calculations on their computers while we talked.
The Internet videos started two years later when a friend asked, “How are you scaling your lessons?” I said, “I’m not.” He said, “Why don’t you make some videos of the tutorials and post them on YouTube?” I said, “That’s a horrible idea. YouTube is for cats playing piano.”
Still, I gave it try. Soon my cousins said they liked me more on YouTube than in person. They were really saying that they found my explanations more valuable when they could have them on demand and where no one would judge them. And soon many people who were not my cousins were watching. By 2008, I was reaching tens of thousands every month.
Youtube is a search engine where producers can upload short videos at no cost. Would the Khan Academy have been possible without this technology?
No. Before YouTube, the cost of hosting streaming videos was incredibly expensive. I wouldn’t have been able to afford the server space for that much video — or traffic. That said, I was probably the 500th person to show up on YouTube with educational videos. Our success probably had to do with the technology being ready and the fact that my content resonated with users.

For the full interview, see:
CLAUDIA DREIFUS, interviewer. “A Conversation With Salman Khan; It All Started With a 12-Year-Old Cousin.” The New York Times (Tues., JAN. 28, 2014): D5.
(Note: ellipsis added; bold in original; the first two paragraphs, and the bold questions, are Claudia Dreifus; the other paragraphs are Salman Khan.)
(Note: the online version of the interview has the date JAN. 27, 2014.)

Dinosaurs Show that Size Does Not Assure Success, or Even Survival

(p. 504) If the Museum of Natural History was going to be, as Carnegie intended, a world-class institution, it needed more than mummies, ana-(p. 505)tomical models, and Appalachian minerals. It had to have a dinosaur or two. The dinosaur was more than simply a crowd-pleaser. For Carnegie and other devotees of evolutionary science, it was an apt symbol of the unpredictability of a universe in which species and races fell into extinction when they failed to adapt to new environments. For men of slight stature, such as Carnegie, there must have been something quite enthralling about this most vivid demonstration that size and power did not guarantee survival.

Source:
Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.
(Note: the pagination of the hardback and paperback editions of Nasaw’s book are the same.)

Growth Slow Due to Policies Impeding Start-Ups

(p. A11) The most recent period of rapid productivity growth in the U.S.–and rapid economic growth–was in the 1980s and ’90s and reflected the remarkable success of new businesses in information and communications technologies, including Microsoft, Apple, Amazon, Intel and Google. These new companies not only created millions of jobs but transformed modern society, changing how much of the world produces, distributes and markets goods and services.
Rising living standards in the future will depend on the continued success of these businesses but also on the next generation of success stories. Getting the U.S. economy back on track will require a much higher annual rate of new business startups. Sadly, the annual rate of new business creation is about 28% lower today than it was in the 1980s, according to our analysis of the U.S. Census Bureau’s Business Dynamics Statistics annual data series.
Why is the startup rate so low? The answer lies in Washington and the policies implemented in the wake of the 2008 financial crisis that were, ironically, intended to grow and stabilize the economy. . . .
This explosion in federal regulation, intervention and subsidies has retarded productivity growth by protecting incumbents at the expense of more efficient producers, including startups. The number of pages in the Federal Code of Regulations peaked at nearly 175,000 in 2012, an increase of more than 7% in President Obama’s first three years.

For the full commentary, see:
EDWARD C. PRESCOTT and LEE E. OHANIAN. “U.S. Productivity Growth Has Taken a Dive; It has averaged about 1.1% since 2011, less than half the historical rate since 1948. Here’s how to increase it.” The Wall Street Journal (Tues., Feb. 4, 2014): A11.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Feb. 3, 2014.)

The Young, with Managerial Experience, Are Most Likely to Become Entrepreneurs

(p. A13) In a current study analyzing the most recent Global Entrepreneurship Monitor (GEM) survey, my colleagues James Liang, Jackie Wang and I found that there is a strong correlation between youth and entrepreneurship. The GEM survey is an annual assessment of the “entrepreneurial activity, aspirations and attitudes” of thousands of individuals across 65 countries.
In our study of GEM data, which will be issued early next year, we found that young societies tend to generate more new businesses than older societies. Young people are more energetic and have many innovative ideas. But starting a successful business requires more than ideas. Business acumen is essential to the entrepreneur. Previous positions of responsibility in companies provide the skills needed to successfully start businesses, and young workers often do not hold those positions in aging societies, where managerial slots are clogged with older workers.
In earlier work (published in the Journal of Labor Economics, 2005), I found that Stanford MBAs who became entrepreneurs typically worked for others for five to 10 years before starting their own businesses. The GEM data reveal that in the U.S. the entrepreneurship rate peaks for individuals in their late 20s and stays high throughout the 30s. Those in their early 20s have new business ownership rates that are only two-thirds of peak rates. Those in their 50s start businesses at about half the rate of 30-year-olds.
Silicon Valley provides a case in point. Especially during the dot-com era, the Valley was filled with young people who had senior positions in startups. Some of the firms succeeded, but even those that failed provided their managers with valuable business lessons.
My co-author on the GEM study, James Liang, is an example. After spending his early years as a manager at the young and rapidly growing Oracle, he moved back to China to start Ctrip, one of the country’s largest Internet travel sites.

For the full commentary, see:
EDWARD P. LAZEAR. “The Young, the Restless and Economic Growth; Countries with a younger population have far higher rates of entrepreneurship.” The Wall Street Journal (Mon., Dec. 23, 2013): A13.
(Note: the online version of the commentary has the date Dec. 22, 2013.)

The Lazear paper mentioned above, is:
Lazear, Edward P. “Entrepreneurship.” Journal of Labor Economics 23, no. 4 (October 2005): 649-80.

It Does Not Take a Government to Raise a Railroad

(p. A17) . . . , All Aboard Florida (the train will get a new name this year), is not designed to push political buttons. It won’t go to Tampa. It will zip past several aggrieved towns on Florida’s Treasure Coast without stopping.
Nor will the train qualify as “high speed,” except on a stretch where it will hit 125 miles an hour. Instead of running on a dedicated line, the new service will mostly share existing track with slower freight trains operated by its sister company, the Florida East Coast Railway.
But the sponsoring companies, all owned by the private-equity outfit Fortress Investment Group, appear to have done their sums. By minimizing stops, the line will be competitive with road and air in connecting the beaches, casinos and resorts of Miami and Fort Lauderdale with the big airport and theme-park destination of Orlando. Capturing a small percentage of the 50 million people who travel between these fleshpots, especially European visitors accustomed to intercity rail at home, would let the train cover its costs and then some.
But Fortress has a bigger fish in the pan. Its local operation, Florida East Coast Industries, is a lineal progeny of Henry Flagler, the 1890s entrepreneur who created modern Florida when he built a rail line to support his resort developments. Flagler’s heirs are adopting the same model. A Grand Central-like complex will rise on the site of Miami’s old train station. A similar but smaller edifice is planned for Fort Lauderdale.
The project is a vivid illustration of the factors that have to fall in place to make passenger rail viable nowadays. If the Florida venture succeeds, it would be the only intercity rail service anywhere in the world not dependent on government operating subsidies. It would be the first privately run intercity service in America since the birth of Amtrak in 1971.

For the full commentary, see:
HOLMAN W. JENKINS, JR. “BUSINESS WORLD; A Private Railroad Is Born; All Aboard Florida isn’t looking for government operating subsidies.” The Wall Street Journal (Weds., Jan. 15, 2014): A17.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Jan. 14, 2014.)

Carnegie Said “Socialism Is the Grandest Theory Ever Presented”

More on why Andrew Carnegie is not my favorite innovative entrepreneur:

(p. 257) “But are you a Socialist?” the reporter asked.

Carnegie did not answer directly. “I believe socialism is the grandest theory ever presented, and I am sure some day it will rule the world. Then we will have obtained the millennium…. That is the state we are drifting into. Then men will be content to work for the general welfare and share their riches with their neighbors.”
“‘Are you prepared now to divide your wealth’ [he] was asked, and Mr. Carnegie smiled. ‘No, not at present, but I do not spend much on myself. I give away every year seven or eight times as much as I spend for personal comforts and pleasures.”

Source:
Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.
(Note: ellipsis, and bracketed pronoun, in original.)
(Note: the pagination of the hardback and paperback editions of Nasaw’s book are the same.)

“Innovation” Word “Is Way Over-Used”

Source of Pop-Tarts image: http://cdn.foodbeast.com.s3.amazonaws.com/content/wp-content/uploads/2013/05/poptarts.png

(p. B1) It measures nearly 3 inches by 5 inches, and it’s made from enriched flour, corn syrup and creamy peanut butter.

This is Kellogg’s Gone Nutty! peanut butter Pop-Tart. If you agree with Kellogg CEO John Bryant, it’s one of the cereal company’s important products of 2013. He went so far as to call it an innovation.
Listen to the chiefs of America’s biggest companies, and you’ll find the Gone Nutty! Pop-Tart has plenty of company. Most CEOs now spray the word “innovation” as if it were an air freshener. A little spritz can’t hurt.
In the last three months, CEOs of S&P 500 companies have put the “innovation” word on Peony & Blush Suede perfume, premium potash and higher-alcohol Miller beer. “Innovation” also describes Dun & Bradstreet credit reports and PetSmart’s temporary tattoos for pets.
Back in 2007, 99 companies in the S&P 500 mentioned innovation in their third-quarter conference calls, according to reviews of transcripts from Capital IQ. This year the number was 197.
When Boston Consulting Group asked 1,500 executives to rank their company innovation from 1-10, more than two-thirds rated themselves a seven or higher.
The word “is way overused,” says International Paper CEO John Faraci.
. . .
(p. B8) As for the peanut butter Pop-Tarts, a Kellogg spokeswoman says that it had long been one of the most-requested new flavors.
“Development challenges and nut-allergy concerns stood in the way of launching this innovation. Since its launch, Pop-Tarts Gone Nutty has exceeded our expectations.”
There’s nothing wrong with keeping pace. It’s what companies must do. But it’s worth asking at your company, no matter what words the CEO uses: Where does survival end
and real innovation begin?

For the full commentary, see:
DENNIS K. BERMAN. “THE GAME; Is a Peanut Butter Pop-Tart an Innovation?” The Wall Street Journal (Weds., December 4, 2013): B1 & B8.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date December 3, 2013.)

Trying to Inspire “Parents to Raise More Walts and Roys”

“A rendering of the Walt Disney Birthplace, a planned private museum in Chicago.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C3) LOS ANGELES — The on-again-off-again campaign to turn Walt Disney’s Chicago birthplace into an attraction has taken an unexpected new turn. And two theme park ride designers who mostly work for Disney rivals are at the wheel.
. . .
“We don’t want to disrupt the neighborhood with a big attraction,” Mr. Young said. “But we’re also not interested in just putting a plaque on a house.” Ms. Benadon added: “Our dream is that this house becomes a place that inspires creativity. We want to inspire parents to raise more Walts and Roys.”
The couple have worked on attractions like SeaWorld shows; Madagascar: A Crate Adventure, a water ride at Universal Studios Singapore; and theme parks in China that are seeking to compete with Shanghai Disneyland, which is under construction.
. . .
So far, . . . , they have not contacted the Walt Disney Company. “We wanted to do this ourselves,” Ms. Benadon said.
. . .
But Ms. Benadon and Mr. Young do have one important ally: Roy P. Disney, whose grandfather, Roy O. Disney, and great-uncle, Walt, founded the company. “On behalf of the Disney family,” Mr. Disney said in a statement, “we are so pleased to see Walt Disney’s historic birthplace and family home being restored to its humble origins.”

For the full story, see:
BROOKS BARNES. “A Chance to Step Into Disney’s Childhood.” The New York Times (Weds., December 4, 2013): C3.
(Note: ellipses added.)
(Note: the online version of the story has the date December 3, 2013.)

Carnegie “Spoke Positively of Socialism”

Carnegie is a mixed bag for several reasons. Here is one more:

(p. 256) “A MILLIONAIRE SOCIALIST. MR. ANDREW CARNEGIE PROCLAIMS IN FAVOR OF SOCIALISTIC DOCTRINES.” So read the headline of the January 2, 1885 front-page story in the New York Times, occasioned by Carnegie’s remarks “in favor of Socialism” at the December meeting of the Nineteenth Century Club. One of the guests at that meeting was John Swinton, the publisher of a rather obscure radical weekly named Swinton’s. Swinton invited Carnegie to sit for an interview and again he spoke positively of socialism.

Source:
Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.
(Note: the pagination of the hardback and paperback editions of Nasaw’s book are the same.)